by inpac01 | Dec 20, 2021 | Real Estate
부동산 지식 28-Real Estate Contract Law
Real Estate Contract Law
Contract Validity and Enforceability
Contract Creation
Classifications of Contracts
Contract Termination
CONTRACT VALIDITY AND ENFORCEABILITY
Legal status of contracts
Criteria for validity
Validity of a conveyance contract
Enforcement limitations
Electronic contracting
A contract is an agreement between two or more parties who, in a “meeting
of the minds,” have pledged to perform or refrain from performing some act.
A valid contract is one that is legally enforceable by virtue of meeting certain
requirements of contract law. If a contract does not meet the requirements, it
is not valid and the parties to it cannot resort to a court of law to enforce its
provisions.
Note that a contract is not a legal form or a prescribed set of words in a
document, but rather the intangible agreement that was made in “the meeting
of the minds” of the parties to the contract.
by inpac01 | Dec 1, 2021 | Real Estate
부동산 지식 27-Legal Descriptions
Legal Descriptions
Methods of Legal Description
Metes and Bounds
The Rectangular Survey System
Recorded Plat Method
Describing Elevation
METHODS OF LEGAL DESCRIPTION
There are many common ways of describing properties: address (100 Main
Street), name (Buckingham Palace), and general description (“the south forty
acres”). Such informal descriptions are not acceptable for use in public
recordation or, generally speaking, in a court of law because they lack both
permanence and sufficient information for a surveyor to locate the property.
Even if a legal document or public record refers to an address, the
reference is always supported by an accepted legal description.
A legal description of real property is one which accurately locates and
identifies the boundaries of the subject parcel to a degree acceptable by courts
of law in the state where the property is located.
The general criterion for a legal description is that it alone provides sufficient
data for a surveyor to locate the parcel. A legal description identifies the
property as unique and distinct from all other properties.
Legal description provides accuracy and consistency over time. Systems of
legal description, in theory, facilitate transfers of ownership and prevent
boundary disputes and problems with chain of title.
A legal description is required for:
public recording
creating a valid deed of conveyance or lease
completing mortgage documents
executing and recording other legal documents
In addition, a legal description provides a basis for court rulings on
encroachments and easements.
120 Principles of Real Estate Practice
The three accepted methods of legally describing parcels of real estate are:
metes and bounds
rectangular survey system, or government survey method
recorded plat method, or lot and block method
Since the metes and bounds method preceded the inception of the rectangular
survey system, the older East Coast states generally employ metes and bounds
descriptions. States in the Midwest and West predominantly use the rectangular
survey system. Some states combine methods.
METES AND BOUNDS
A metes and bounds description identifies the boundaries of a parcel of real estate
using reference points, distances, and angles. The description always identifies an
enclosed area by starting at an origination point, called point of beginning, or
POB, and returning to the POB at the end of the description. A metes and bounds
description must return to the POB in order to be valid.
The term “metes” refers to distance and direction, and the term “bounds”
refers to fixed reference points, or monuments and landmarks, which may
be natural and artificial. Natural landmarks include trees, rocks, rivers, and
lakes. Artificial landmarks are typically surveyor stakes.
Many states use metes and bounds description to describe properties within
the rectangular survey system.
A metes and bounds description begins with an identification of the city, county,
and state where the property is located. Next, it identifies the POB and describes
the distance and direction from the POB to the first monument, and then to
subsequent monuments that define the property’s enclosed perimeter.
THE RECTANGULAR SURVEY SYSTEM
The survey grid
Sections of township
Fractions of a section
Converting section fractions to acres
RECORDED PLAT METHOD
Subdivision plat map
Description format
by inpac01 | Nov 30, 2021 | Real Estate
부동산 지식 26-Land Use Planning And Control-4.Environmental Controls
1.Real Estate Planning
2.Public Land Use Control
3.Private Land Use Control
4.Environmental Controls
ENVIRONMENTAL CONTROLS
Areas of concern
Major legislation
Responsibilities and liabilities
In recent years, federal and state legislatures have enacted laws to conserve and
protect the environment against the hazards of growth and development,
particularly in terms of air, water, and soil quality.
Regional, county, and local planners must integrate environmental laws into
their respective land use plans and regulations. Private property owners are
responsible for complying with these laws.
Areas of concern Air. Air quality, both indoor and outdoor, has been a matter of concern since the
1960’s. With today’s construction methods creating airtight, energy-efficient
structures, attention to sources of indoor air pollution is more important than
ever. Off-gassing from synthetic materials and lack of ventilation can lead to
such consequences as Sick Building Syndrome (SBS) and Building-Related
Illness (BRI) as well as other health problems. Among the significant threats are:
asbestos, a powdery mineral once commonly used as a fireproof insulating
material around pipes, in floor tiles and linoleum, in siding and roofing, in
wallboard, joint compound, and many other applications.
When airborne, it is a health hazard. Its use today is highly restricted,
and removal can be expensive and dangerous. Inspection by a certified
asbestos inspector is the best way to determine whether a building needs
treatment.
carbon monoxide, a colorless, odorless, poisonous gas that may result from
faulty heating equipment. Home and commercial detection devices are
available.
112 Principles of Real Estate Practice
formaldehyde, a chemical used in building materials and in other items
such as fabrics and carpeting. As it ages, formaldehyde gives off a
colorless, pungent gas.
Its use in urea-formaldehyde foam insulation (UFFI) was banned 1982
(ban later reduced to a warning) but the material is still present in many
structures. Other substances known in general as volatile organic
compounds (VOCs) and used in construction materials such as adhesives
emit toxic fumes. Professional testing can identify levels and, in some
cases, sources of formaldehyde gas and other VOCs.
lead, a heavy metal once widely used in paints and plumbing materials. It
has been banned in paint since 1978 and in new plumbing since 1988.
It continues to be a health threat, particularly to children, as it occurs in
airborne paint particles, paint chips, and soil and groundwater polluted by
various external sources of emission. Inspection should be performed by
licensed lead inspectors.
mold, a fungus that grows in the presence of moisture and oxygen on
virtually any kind of organic surface.
It often destroys the material it grows on and emits toxic irritants into the
air. Tightly sealed structures with inadequate ventilation are most
susceptible. Roof leaks, improper venting of appliances, runoff from gutters
and downspouts, and flood damage are common contributors. In recent
years, mold- and mildew-related lawsuits and claims have become
substantial.
radon, a colorless, odorless, radioactive gas that occurs naturally in the soil
throughout the United States.
It enters buildings through foundation and floor cracks, wall seams, sump
pits, and windows, among other ways. At accumulations above certain
levels, it is suspected of contributing to cancer. Excessive radon can be
removed by special ventilation systems. Professional and home inspections
are available.
Soil and water. Soil, groundwater, and drinking water supplies are vulnerable to
pollution from leaking landfills; improper waste disposal; agricultural runoff;
industrial dumping in waterways; highway and rail spills; industrial emissions;
internal combustion emissions; and underground tanks leaking fuels and
chemicals, to mention but a few sources. Some of the problems subject to
controls are:
dioxins, a family of compounds produced as a byproduct of manufacturing
and incinerating materials that contain chlorine
lead and mercury
MTBE, Methyl Tertiary Butyl Ether, a gasoline additive
PCB, Polychlorinated Biphenyl, a substance formerly widely used as an
electrical insulation
Chapter 8: Land Use Planning and Control 113
Underground Storage Tanks (USTs), regulated since 1984
Wetlands, considered part of the natural water filtering system as well as
special habitats, subject to restrictions on development and use.
Other ambient and natural conditions. Other regulated and
controlled environmental conditions include:
Electromagnetic Fields (EMFs) created by powerlines
noise created by airports, air, rail and highway traffic
earthquake and flood hazards that affect hazard insurance, lending
practices, and construction requirements for buildings in designated flood
and earthquake zones.
Exhibit 8.3 Environmental Concerns
Indoors Outdoors
Air asbestos, BRI, carbon monoxide,
formaldehyde, lead-based paint,
mold, radon, SBS, VOCs
airborne lead, carbon dioxide,
mercury, sulfur, dioxins
Soil dioxins, lead, PCBs, waste,
hazardous materials
Water dioxins, lead plumbing, leadpaint, mercury, MTBE, PCBs
dioxins, lead, mercury, MTBE,
PCBs, USTs, waste, hazardous
materials
Ambience EMFs, noise
Structure flood, earthquake
BRI: Building-Related Illness SBS:
Sick Building Syndrome VOC: Volatile
Organic Compound MTBE: Methyl
Tertiary Butyl Ether
PCB: Polychlorinated Biphenyl
UST: Underground Storage Tank
EMF: Electromagnetic Field
UFFI: Urea-Formaldehyde Foam
Insulation
Major legislation National Environmental Policy Act (1969). This act created the Environmental
Protection Agency (EPA) and the Council for Environmental Quality, giving
them a mandate to establish environmental standards for land use planning. The
act also required environmental impact surveys on large development projects.
Clean Air Amendment (1970). This act authorized the EPA to establish air
quality standards for industrial land uses as well as for automobile and airplane
emissions.
Water Quality Improvement Act (1970), the Water Pollution Control
Act amendment (1972), the Clean Water Act Amendment (1977).
These acts addressed standards to control water pollution and industrial
wastes from the standpoints of future prevention as well as remediation of
existing pollution.
114 Principles of Real Estate Practice
Resource Recovery Act (1970), the Resource Conservation and
Recovery Act (1976), the Comprehensive Environmental Response,
Compensation and Liability Act (Superfund) (1980), the Superfund
Amendment and Reauthorization Act (1986). These acts addressed
disposal of solid and toxic wastes and measures for managing waste. In
addition, the Superfund act provided money for hazardous waste disposal
and the authority to charge cleanup costs to responsible parties.
Lead-based paint ban (1978) and Residential Lead-based Paint
Hazard Reduction Act (1992, 1996). These regulations banned lead in the
manufacture of paint and established disclosure requirements and
guidelines for testing and remediation.
Chapter 8: Land Use Planning and Control 115
Exhibit 8.4 Landmarks in Environmental Control Legislation
Legislation Date Regulated
Solid Waste Disposal Act (later part of RCRA) 1965 (1976,
1999, 2002)
landfills
Air Quality Act, Clean Air Act 1967 (1970) air quality standards
National Environmental Policy Act (NEPA) 1969 (1970) created EPA
Flood Control Act amended 1969 building in flood zones; flood insurance
Resource Recovery Act 1970 solid waste disposal
Water Quality Improvement Act 1970 dumping in navigable waters; wetlands
Water Pollution Control Act amendment 1972 dumping in navigable waters; wetlands
Marine Protection Research and Sanctuaries Act 1972 offshore waste dumping
Noise control legislation 1972 airport- and transportation-related noise
Coastal Zone Management Act 1972 beaches, marine habitats
Clean Water Act 1972 (1977) dumping in navigable waters; wetlands
Safe Drinking Water Act 1974 public water supply, lead
Resource Conservation and Recovery Act (RCRA) 1976 hazardous waste, solid waste
Toxic Substances Control Act 1976 industrial chemicals
Lead-based paint ban (US Consumer Product
Safety Commission rule)
1978 lead-based paint in residences
PCB ban (EPA rule) 1979 polychlorinated biphenyls
RCRA amendment 1984 underground storage tanks
Comprehensive Environmental Response,
Compensation and Liability Act
(CERCLA)
1980 hazardous waste disposal
UFFI ban 1982 formaldehyde in insulation materials
Superfund Amendment and Reauthorization Act 1986 hazardous waste cleanup costs
Asbestos ban (EPA rule) 1989 asbestos in building materials
Residential Lead-based Paint Hazard Reduction
Act (EPA and HUD rule)
1992 (1996) lead-based paint disclosure and treatment
Flood Insurance Reform Act 1994 flood insurance in flood zones
Brownfields legislation 2002 industrial site cleanup
116 Principles of Real Estate Practice
Responsibilities
& liabilities Licensees are expected to be aware of environmental issues and to know where
to look for professional help. They are not expected to have expert knowledge
of environmental law nor of physical conditions in a property. Rather, they
must treat potential environmental hazards in the same way that they treat
other material facts about a property: disclosure.
In sum, for their own protection, licensees should be careful to:
be aware of potential hazards
disclose known material facts
distribute the HUD booklet (below)
know where to seek professional help.
Lead. The Lead-based Paint Act of 1992 requires a seller or seller’s agent to
disclose known lead problems in properties built before 1978. The licensee
must give the buyer or lessee a copy of the EPA-HUD-US Consumer Product
Safety Commission booklet, “Protect Your Family from Lead in your home.”
Further, the 1996 lead-based paint regulation requires sellers or lessors of almost
all residential properties built before 1978 to disclose known lead-based paint
hazards and provide any relevant records available. The seller is not required to
test for lead but must allow the buyer a ten-day period for lead inspection. Only a
licensed lead professional is permitted to deal with testing, removal or
encapsulation. It is the real estate practitioner’s responsibility to ensure
compliance.
CERCLA/Superfund. Under CERCLA and the Superfund Amendment of 1986,
current landowners as well as previous owners of a property may be held liable for
environmental violations, even if “innocent” of a violation. Sellers often carry the
greatest exposure, and real estate licensees may be held liable for improper
disclosure.
A real property owner can be held liable for the entire cost of remediating soil,
groundwater, or indoor air contamination. A tenant can be held liable for cleanup
costs as an “operator” if tenant operations are linked to contamination
Sale of a contaminated property. Selling a property with an environmental
problem does not avoid liability for the seller, although seller and buyer may
agree to share or transfer some liability. If there is a concern, a Phase I audit or
Environmental Site Assessment (ESA) should be conducted before proceeding
with the transaction. A Phase I audit identifies
prior uses
presence of hazardous materials
The Phase I ESA reviews environmental documents; conducts a title search for
environmental liens and restrictions; and includes a visual inspection of the site
and surrounding properties. There is no sampling or testing. Fannie Mae,
Freddie Mac, and HUD require special Phase I ESAs on certain properties.
A Phase II audit (ESA) is conducted if a site is considered contaminated. This is a
more detailed investigation using chemical analysis to uncover hazardous
Chapter 8: Land Use Planning and Control 117
substances and/or petroleum hydrocarbons in samples of soil, groundwater or
building materials.
A Phase III audit (ESA) involves remediation. Intensive testing, sampling,
monitoring, and modeling are applied to design plans for remediation, cleanup,
and follow-up monitoring. Remediation may use a variety of techniques and
technologies, such as excavation and removal, dredging, chemical treatment,
pumping, and solidification. Major remediation efforts usually require extensive
consultation with the surrounding community. Federal funding may be available.
See Chapter 20 for further discussion. For more information, also check these
sources:
asbestos https://www.epa.gov/indoor-air-quality-iaq
carbon monoxide https://www.epa.gov/indoor-air-quality-iaq
formaldehyde https://www.epa.gov/indoor-air-quality-iaq
lead https://www.epa.gov/lead
https://www.hud.gov/program_offices/healthy_homes/enforcem
ent/disclosure
https://www.epa.gov/lead/real-estate-disclosure
mold https://www.epa.gov/mold/mold-and-your-home
radon https://www.epa.gov/indoor-air-quality-iaq
https://www.hud.gov/program_offices/healthy_homes/healthyhome
s/radon
CERCLA https://www.epa.gov/superfund
by inpac01 | Nov 30, 2021 | Real Estate
부동산 지식 25-Land Use Planning And Control-3.Private Land Use Control
1.Real Estate Planning
2.Public Land Use Control
3.Private Land Use Control
4.Environmental Controls
PRIVATE LAND USE CONTROL
Deed restriction
Declaration restriction
Deed condition
Property owners in the private sector can regulate land use to some extent
through deed restrictions and deed conditions.
Deed restriction A restriction expressed in a conveyance (deed or lease) of a residential,
commercial, or industrial property places limits on the use of the property. Such
restrictions are also referred to as “covenants, conditions, and restrictions,” or
CCRs. A quitclaim deed can terminate a private deed restriction.
Typical restrictions concern:
required minimum area of a residence
setback
prohibition against construction of sheds or secondary buildings
prohibition against conducting certain commercial activities
Deed restrictions may not be discriminatory by restricting ownership or use on
the basis of race, religion, marital status, or gender.
Restrictions on commercial property use may not violate fair trade and anti-trust
laws.
Declaration
restriction The declaration of a subdivision, Planned Unit Development, condominium, and
commercial or industrial park contains private use restrictions. These have the
same legal effect as a deed restriction, as the declaration attaches to the rights in
the property. A private party cannot, however, extinguish a declaration
restriction by agreement or quitclaim deed.
Chapter 8: Land Use Planning and Control 111
The kinds of restrictions found in declarations are much the same as those
found in deeds: construction restraints, aesthetics standards, etc.
The underlying purpose of restrictions is to preserve the value and quality of
the neighborhood, commercial center, or industrial park.
Injunction. A private usage restriction can be enforced by filing for a court
injunction. A court can order the violator to cease and desist, or to correct the
infraction. If, however, owners in a subdivision or park allow a violation to
continue for a sufficient length of time, they can lose their right to legal recourse.
Deed condition A deed condition may restrict certain uses of a property, much like a deed
restriction. However, violation of a deed condition gives the grantor the right to
re- take possession of the property and file suit for legal title.
by inpac01 | Nov 29, 2021 | Real Estate
부동산 지식 24-Land Use Planning And Control-2.Public Land Use Control
1.Real Estate Planning
2.Public Land Use Control
3.Private Land Use Control
4.Environmental Controls
PUBLIC LAND USE CONTROL
Zoning
Zoning administration
Subdivision regulation
Building codes
Public acquisition and ownership
Environmental restrictions
At the state level, the legislature enacts laws that control and restrict land use,
particularly from the environmental perspective. At the local level, county and
city governments control land use through the authority known as police
power. The most common expressions of police power are county and
municipal zoning. Other examples of public land use control are:
subdivision regulations
building codes
eminent domain
environmental restrictions
development requirements
Governments also have the right to own real property for public use and welfare.
In exercising its ownership rights, a municipality may annex property adjacent
to its existing property or purchase other tracts of land through conventional
transfers. Where necessary, it may force property owners to sell their property
through the power of eminent domain.
Zoning Zoning is the primary tool by which cities and counties regulate land use and
implement their respective master plans. The Constitution grants the states the
legal authority to regulate, and the states delegate the authority to counties and
municipalities through legislation called enabling acts.
The zoning ordinance. The vehicle for zoning a city or county is the zoning
ordinance, a regulation enacted by the local government. The intent of zoning
ordinances is to specify land usage for every parcel within the jurisdiction. In
some areas, state laws permit zoning ordinances to apply to areas immediately
beyond the legal boundaries of the city or county.
Zoning ordinances implement the master plan by regulating density, land
use intensity, aesthetics, and highest and best use. Ordinances typically
address:
the nature of land use– office, commercial, residential, etc.
size and configuration of a building site, including setbacks,
sidewalk requirements, parking requirements, and access
site development procedures
construction and design methods and materials, including
height restrictions, building-to-site area ratios, and
architectural styles
use of space within the building
signage
Ordinance validity. Local planners do not have unlimited authority to do
whatever they want. Their zoning ordinances must be clear in import, apply to
all parties equally, and promote health, safety, and welfare of the community in
a reasonable manner.
Building permits. Local governments enforce zoning ordinances by issuing
building permits to those who want to improve, repair, or refurbish a property.
To receive a permit, the project must comply with all relevant ordinances and
codes. Further zoning enforcement is achieved through periodic inspections.
Types of zones. One of the primary applications of zoning power is the
separation of residential properties from commercial and industrial uses. Proper
design of land use in this manner preserves the aesthetics and value of
neighborhoods and promotes the success of commercial enterprises through
intelligently located zones.
Chapter 8: Land Use Planning and Control 105
Six common types of zone are
residential
commercial
industrial
agricultural
public
planned unit development (PUD)
Residential. Residential zoning restricts land use to private, non-commercial
dwellings. Sub-zones in this category further stipulate the types of residences
allowed, whether single-family, multi-unit complexes, condominiums, publicly
subsidized housing, or other form of housing.
Residential zoning regulates:
density, by limiting the number and size of dwelling units and lots
in an area
values and aesthetics, by limiting the type of residences allowed.
Some areas adopt buffer zones to separate residential areas from
commercial and industrial zones.
Commercial. Commercial zoning regulates the location of office and retail land
usage. Some commercial zones allow combinations of office and retail uses on a
single site. Sub-zones in this category may limit the type of retail or office
activity permitted, for example, a department store versus a strip center.
Commercial zoning regulates:
intensity of usage, by limiting the area of store or office per site
area. Intensity regulation is further achieved by minimum parking
requirements, setbacks, and building height restrictions.
Industrial. Industrial zoning regulates:
intensity of usage
type of industrial activity
environmental consequences
A municipality may not allow some industrial zones, such as heavy industrial, at
all. The industrial park is a relatively recent concept in industrial zoning.
Agricultural. Agricultural zoning restricts land use to farming, ranching, and
other agricultural enterprises.
Public. Public zoning restricts land use to public services and recreation. Parks,
post offices, government buildings, schools, and libraries are examples of uses
allowed in a public zone.
Planned Unit Development (PUD). planned unit development zoning restricts
use to development of whole tracts that are designed to use space efficiently and
106 Principles of Real Estate Practice
maximize open space. A PUD zone may be for residential, commercial, or
industrial uses, or combinations thereof.
Zoning
administration Zoning Board of Adjustment. A county or local board, usually called the
zoning board of adjustment or zoning appeals board, administers zoning
ordinances. The board rules on interpretations of zoning ordinances as they apply
to specific land use cases presented by property owners in the jurisdiction. In
effect, the zoning board is a court of appeals for owners and developers who
desire to use land in a manner that is not entirely consistent with existing
ordinances.
The board conducts hearings of specific cases and renders official
decisions regarding the land use based on evidence presented.
A zoning board generally deals with such issues and appeals as:
nonconforming use
variance
special exception or
conditional use permit
zoning amendment
If the board rejects an appeal, the party may appeal the ruling further in a court
of law.
Nonconforming use. A nonconforming use is one that clearly differs from
current zoning. Usually, nonconforming uses result when a zoning change
leaves existing properties in violation of the new ordinance. This type of
nonconforming use is a legal nonconforming use. A board usually treats this
kind of situation by allowing it to continue either
Zoning Board
of
Adjustment
Variance
–hardship
Amendment
–change
zone
Special
exception
–public good
Nonconforming
use
–legal
–illegal
Chapter 8: Land Use Planning and Control 107
indefinitely
until the structures are torn down
only while the same use continues, or
until the property is sold
For instance, a motel is situated in a residential area that no longer allows
commercial activity. The zoning board rules that the motel may continue to
operate until it is sold, destroyed or used for any other commercial purpose.
An illegal nonconforming use is one that conflicts with ordinances that
were in place before the use commenced. For instance, if the motel in the
previous example is sold, and the new owner continues to operate the
property as a motel, the motel is now an illegal, nonconforming use.
Variance. A zoning variance allows a use that differs from the applicable
ordinance for a variety of justifiable reasons, including that:
compliance will cause unreasonable hardship
the use will not change the essential character of the area
the use does not conflict with the general intent of the ordinance
For example, an owner mistakenly violates a setback requirement by two feet.
His house is already constructed, and complying with the full setback now
would be extremely expensive, if not impossible. The zoning board grants a
variance on the grounds that compliance would cause an unreasonable hardship.
A grant of a zoning variance may be unconditional, or it may require
conditions to be fulfilled, such as removing the violation after a certain time.
Special exception. A special exception grant authorizes a use that is not
consistent with the zoning ordinance in a literal sense, yet is clearly beneficial
or essential to the public welfare and does not materially impair other uses in
the zone.
A possible example is an old house in a residential zone adjacent to a retail
zone. The zoning board might grant a special exception to a local group that
proposes to renovate the house and convert it to a local museum, which is a
retail use, since the community stands to benefit from the museum.
Amendment. A current or potential property owner may petition the zoning
board for an outright change in the zoning of a particular property. For example,
a property zoned for agricultural use has been idle for years. A major employer
desires to develop the property for a local distribution facility, which would
create numerous jobs, and petitions for an amendment. The board changes the
zoning from agricultural to light industrial to permit the development. Since a
change in zoning can have significant economic and social impact, an appeal for
an amendment is a difficult process that often involves public hearings.
Subdivision
regulation In addition to complying with zoning ordinances, a developer of multiple
properties in a subdivision must meet requirements for subdivisions.
108 Principles of Real Estate Practice
Subdivision plat approval. The developer submits a plat of subdivision
containing surveyed plat maps and comprehensive building specifications. The
plat, as a minimum, shows that the plan complies with local zoning and building
ordinances. The project can commence only after the relevant authority has
approved the plat.
Subdivision requirements typically regulate:
location, grading, alignment, surfacing, street width, highways
sewers and water mains
lot and block dimensions
building and setback lines
public use dedications
utility easements
ground percolation
environmental impact report
zoned density
Concurrency. Many states have adopted policies that require developers,
especially of subdivisions, to take responsibility for the impact of their projects
on the local infrastructure by taking corrective action. Concurrency is a policy
that requires the developer to make accommodations concurrently with the
development of the project itself, not afterwards. For example, if a project will
create a traffic overload in an area, the developer may have to widen the road
while constructing the project.
FHA requirements. In addition to local regulation, subdivisions must meet
FHA (Federal Housing Authority) requirements to qualify for FHA financing
insurance. The FHA sets standards similar to local ordinances to ensure an
adequate level of construction quality, aesthetics, and infrastructure services.
Building codes Building codes allow the county and municipality to protect the public against
the hazards of unregulated construction. Building codes establish standards for
virtually every aspect of a construction project, including offsite improvements
such as streets, curbs, gutters, drainage systems, and onsite improvements such
as the building itself.
Building codes typically address:
architectural and engineering standards
construction materials standards
building support systems such as life safety, electrical,
mechanical, and utility systems
Certificate of occupancy. Building inspectors inspect a new development or
improvement for code compliance. If the work complies, the municipality or
county issues a certificate of occupancy which officially clears the property for
occupation and use.
Public acquisition
and ownership If efforts to regulate privately owned property are inadequate or impractical
in a particular situation, or if there is a compelling public need, a county or
local government may acquire property by means of direct purchase.
Chapter 8: Land Use Planning and Control 109
A government body might acquire land because of the public need for:
thoroughfares and public rights-of-way
recreational facilities
schools
essential public facilities
urban renewal or redevelopment
In many cases, public acquisition of property is a voluntary transaction between
the government entity and the private owner. However, if the private party is
unwilling to sell, the government may purchase the property anyway. The power
to do this is called eminent domain.
Eminent domain. Eminent domain allows a government entity to purchase a
fee, leasehold, or easement interest in privately owned real property for the
public good and for public use, regardless of the owner’s desire to sell or
otherwise transfer any interest. In exchange for the interest, the government must
pay the owner “just compensation.”
To acquire a property, the public entity initiates a condemnation suit. Transfer of
title extinguishes all existing leases, liens, and other encumbrances on the
property. Tenants affected by the condemnation sale may or may not receive
compensation, depending on the terms of their agreement with the landlord.
Public entities that have the power of eminent domain include:
all levels of government
public districts (schools, etc.)
public utilities
public service corporations (power companies, etc.)
public housing and redevelopment agencies
other government agencies
To acquire a property, the public entity must first adopt a formal resolution to
acquire the property, variously called a “resolution of necessity.” The resolution
must be adopted at a formal hearing where the owner may voice an opinion.
Once adopted, the government agency may commence a condemnation suit in
court. Subsequently, the property is purchased and the title is transferred in
exchange for just compensation. Transfer of title extinguishes all existing leases,
liens, and other encumbrances on the property. Tenants affected by the
condemnation sale may or may not receive compensation, depending on the
terms of their agreement with the landlord.
In order to proceed with condemnation, the government agency must demonstrate
that the project is necessary, the property is necessary for the project, and that the
location offers the greatest public benefit with the least detriment.
As an eminent domain proceeding is generally an involuntary acquisition, the
condemnation proceeding must accord with due process of law to ensure that it
does not violate individual property rights. Further, the public entity must justify
its use of eminent domain in court by demonstrating the validity of the intended
public use and the resulting “public good” or “public purpose” ultimately served.
110 Principles of Real Estate Practice
The issue of eminent domain versus individual property rights has recently come
under scrutiny in light of a 2005 Supreme Court ruling that affirmed the rights of
state and local governments to use the power of eminent domain for urban redevelopment and revitalization. The ruling allowed that private parties could
undertake a project for profit without any public guarantee that the project would
be satisfactorily completed. The ruling brought the issue of “public use” into
question, as the use of the re-development could well be private and even a
private for-profit enterprise. The winning argument was that the “public purpose”
is served when redevelopment creates much needed jobs in a depressed urban
area. As a result of this decision, many see the power of eminent domain and the
definition of public good as being in conflict with the constitutional rights of
private property ownership. New and different interpretations of the public’s
right to pre-empt private property ownership by eminent domain may be
expected.
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