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Real Property Rights and Governmental Encumbrances
Real estate represents one of the most important economic assets for individuals and societies. The organization of rights and obligations related to it is an inevitable necessity to ensure its stability and promote investment in it. The concept of real estate ownership is not limited to the absolute right to benefit and dispose, but is subject to restrictions and burdens imposed by laws and government regulations, in addition to the rights that may arise for others on this property. This chapter, “Rights and Restrictions: Governmental Burdens and Rights on Real Estate,” deals in detail with these restrictions and rights, highlighting their fundamental impact on the value and use of the property.
The scientific importance of this topic lies in the fact that it constitutes a cornerstone in understanding the nature of real estate ownership, and defines the scope of powers granted to the owner in مقابل the powers that the state retains or grants to others. Familiarity with these rights and restrictions is necessary for the owner and the investor alike to make informed decisions about purchasing, exploiting, and disposing of real estate. Understanding these restrictions enables the owner to comply with laws and regulations and avoid legal disputes, while enabling the investor to assess the risks and potential returns of real estate investment.
Encumbrances and governmental rights limit real property ownership.
Encumbrances: Non-possessory interests limiting property use or value, without necessarily preventing transfer.
- Financial Encumbrances (Liens or Security Interests): Creditor’s right to sell debtor’s property to settle debt.
- Lien: Creditor’s right to sell property for debt settlement.
- Foreclosure: Legal process of selling mortgaged property for debt settlement.
- Voluntary Lien: Created with debtor’s consent (e.g., mortgage).
- Involuntary Lien: Created by law (e.g., tax lien, construction lien).
- General Lien: Affects all of debtor’s real property.
- Specific Lien: Limited to a specific property (e.g., mortgage).
- Example: A mortgage is a voluntary, specific lien. Unpaid property taxes result in a governmental involuntary, specific lien.
- Non-Financial Encumbrances: Affect property usage.
- Easement: Non-exclusive right to use another’s property for a specific purpose.
- Servient Tenement: Property subject❓ to the easement.
- Dominant Tenement: Property benefiting from the easement.
- Easement Appurtenant: Benefits a specific property, transfers with ownership.
- Easement in Gross: Benefits a person or entity, not tied to a property (e.g., utility lines).
- Profit a Prendre: Right to take something from the property (e.g., crops, minerals).
- Emblement: Tenant’s right to harvest crops planted before property sale, limited to the first harvest after the sale.
- Private Restrictions: Restrictions on property use created in the deed (e.g., subdivision restrictions).
- Example: Granting a neighbor right of way creates an easement. Granting a mining company rights to extract minerals is profit a prendre.
- Easement: Non-exclusive right to use another’s property for a specific purpose.
Governmental Rights: Rights governments have on private property.
- Eminent Domain: Government’s right to seize private property for public use, with just compensation.
- Just Compensation: Fair market value at the time of seizure.
- Condemnation Lawsuit: Lawsuit to seize property if agreement isn’t reached.
- Example: Government taking land for a highway must provide just compensation.
- Taxation: Property is subject to taxes.
- General Property Taxes (Ad Valorem Taxes): Annual taxes based on property value. “Ad Valorem” means “according to value.”
- Special Assessments: levied❓ on specific properties to cover the cost of public improvements benefiting those properties.
- Example: Homeowners pay annual property taxes. A new sewer system results in special assessments.
- Police Power: Government’s power to enact laws for public health, safety, and welfare.
- Land Use Regulations: Community planning ordinances and zoning laws❓.
- Building Codes: Safety standards for construction.
- Subdivision Development Regulations: Regulate land division and development.
- Environmental Protection Legislation: Protects the environment.
- Example: Zoning laws restrict commercial businesses in residential areas. Building codes mandate earthquake resistance.
- Escheat: State’s right to take property of someone who dies without heirs.
- Example: If a person dies without relatives or a will, the property goes to the state.
Chapter Summary
Overview: This chapter clarifies the right❓s and restrictions affecting real property ownership, focusing on encumbrances and governmental rights that limit the absolute authority of the property owner.
Encumbrances:
- Definition: Non-possessory interests that reduce the property’s value or limit its use but do not prevent its transfer.
- Types:
- Financial Encumbrances (Liens): A creditor’s right to sell a debtor’s property and use the proceeds to repay the debt if the terms are not met.
- Voluntary Liens: Created with the debtor’s consent, such as Mortgages and Deeds of Trust.
- Involuntary Liens: Created by law, such as Tax Liens, Judgment Liens, and Construction Liens.
- General Liens: Affect all properties owned by the debtor.
- Specific Liens: Affect a specific property❓ or a defined group of properties.
- Non-Financial Encumbrances: Affect the use of the property.
- Easements: A non-exclusive right to use another person’s property for a specific purpose. The property subject to the easement is called the “Servient Tenement,” and the property benefiting from the easement is called the “Dominant Tenement.”
- Appurtenant Easements: Benefit a specific property and transfer with its ownership.
- Easements in Gross: Benefit individuals or organizations, such as a utility company’s right to install and maintain utility lines.
- Profit a Prendre: The right to take something from the property, such as crops or minerals.
- Emblement: A temporary right for a tenant to harvest a crop planted before the property is sold.
- Private Restrictions: Also known as Deed Restrictions or Covenants, Conditions, and Restrictions (CC&Rs). Created by the deed and impose restrictions on the use of the property, such as building sizes and styles, and are typically enforced by private landowners through homeowner associations.
- Easements: A non-exclusive right to use another person’s property for a specific purpose. The property subject to the easement is called the “Servient Tenement,” and the property benefiting from the easement is called the “Dominant Tenement.”
- Financial Encumbrances (Liens): A creditor’s right to sell a debtor’s property and use the proceeds to repay the debt if the terms are not met.
Governmental Restrictions on Property Rights:
- Even Fee Simple ownership is subject to the government’s legitimate authority.
- Governmental Powers:
- Eminent Domain: The government’s right to take private property for public use with fair compensation, done through a “Condemnation Lawsuit.”
- Taxation: Property ownership is subject to General Property Taxes and Special Assessments.
- General Property Taxes: Levied annually on all non-exempt properties and based on the property’s value (Ad Valorem Taxes).
- Special Assessments: Levied on specific properties to cover the cost of public improvements that benefit those properties.
- Police Power: The government’s right to issue and enforce regulations to protect public health, safety, and welfare, including Land Use Regulations, Zoning Laws, and Building Codes.
- Escheat: The state’s right to reclaim property when a person dies without a will or heirs.
