Real Estate Exam: Land Use Controls, Zoning, Eminent Domain, Police Power

The four government powers that affect real property are police power, eminent domain, taxation, and escheat, remembered by the acronym PETE. Police power is the government's right to regulate property use for public health, safety, and welfare through zoning and building codes. Eminent domain is the right to take private property for public use with just compensation. Taxation is the right to levy charges on property to fund government services. Escheat is the government's right to take ownership of property when the owner dies without a will and without heirs.

Zoning is the local government's primary tool for regulating land use, dividing a jurisdiction into districts and specifying what types of uses are permitted in each. Common zoning categories include residential, commercial, industrial, agricultural, and mixed-use. Zoning ordinances also regulate building height, setback distances from property lines, lot coverage percentages, parking requirements, and density. Zoning is an exercise of police power aimed at protecting public health, safety, and welfare by separating incompatible uses.

A variance is permission to deviate from specific zoning requirements, such as building closer to the lot line than the setback allows or exceeding the maximum building height. The property owner must demonstrate that strict compliance would create an unnecessary hardship due to the unique characteristics of the property, not merely an inconvenience. A special use permit allows a use not normally permitted in the zone but appropriate under certain conditions, such as a church in a residential area. Both require public hearings and board approval.

Eminent domain is the government's constitutional power to take private property for public use, provided the owner receives just compensation. The Fifth Amendment to the Constitution requires this compensation, which is typically the fair market value of the property at the time of taking. The government must demonstrate a legitimate public purpose such as building roads, schools, utilities, or other infrastructure. The process, called condemnation, begins with the government filing a legal action and offering compensation.

A nonconforming use is a property use that was legally established before a zoning change but no longer complies with the new zoning requirements. Also called a grandfathered use, it is allowed to continue under the legal principle that retroactively eliminating lawful uses would be unfair. However, nonconforming uses typically cannot be expanded, intensified, or rebuilt if substantially destroyed. If the nonconforming use is abandoned for a period specified by local law, the right to continue it is lost permanently.

Building codes are regulations that establish minimum standards for the construction, alteration, and maintenance of buildings to protect public health and safety. They cover structural integrity, fire safety, electrical systems, plumbing, ventilation, accessibility, and energy efficiency. Zoning regulates how land is used and where buildings can be placed, while building codes regulate how buildings are constructed and maintained. A project must comply with both. Building inspectors verify compliance during construction, and a certificate of occupancy is issued upon completion.

Escheat is the legal process by which property passes to the state when the owner dies intestate, meaning without a valid will, and no heirs can be found. The principle ensures that property does not remain ownerless indefinitely. Each state's intestate succession laws define the order of inheritance through spouse, children, parents, siblings, and more distant relatives. Only when absolutely no heir can be located does the property escheat to the state. Escheat also applies to abandoned personal property, such as dormant bank accounts, through state unclaimed property laws.

A deed restriction, also called a restrictive covenant, is a private limitation on property use imposed by the original developer or a homeowners association, recorded in the deed or subdivision declaration. Zoning is a public, government-imposed regulation. Both limit how property can be used, but they differ in origin, enforcement, and scope. Deed restrictions are enforced by other property owners through civil lawsuits, while zoning is enforced by local government through fines and code enforcement. When deed restrictions and zoning conflict, the more restrictive standard applies.

A comprehensive plan, also called a master plan or general plan, is a long-range document adopted by a local government that guides future development and land use decisions for the entire jurisdiction. It addresses land use patterns, transportation, housing, public facilities, parks, environmental protection, and economic development. Zoning ordinances are the primary tool for implementing the comprehensive plan. Courts may invalidate zoning changes that are inconsistent with the adopted comprehensive plan because zoning must serve the community's welfare as expressed in its plan.

Inverse condemnation occurs when a property owner claims the government has effectively taken their property without formally exercising eminent domain and without paying just compensation. Unlike condemnation where the government initiates the action, inverse condemnation is filed by the property owner who alleges a government action, such as flooding land through a public project or imposing regulations that eliminate all economic use, amounts to a taking. If successful, the court orders the government to pay just compensation. The landmark Supreme Court case Lucas v.