Private Restrictions on Real Estate Ownership

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Private Restrictions onReal Estate Ownership

• Real Estate 310
• Principles of Real Estate
• Dr. Longhofer

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Its My Property, Isnt It?

• Even someone who holds a fee simple interest in
  real estate is restricted in what she can do with
  her property
• Private agreements and claims may restrict how
  the property can be used
• Public regulations and other governmental actions
  may also limit an owners use of the property
• An encumbrance is a right or interest by someone
  other than the property owner that affects the
  title or use of real estate

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Liens

• A lien is a claim or charge against a persons
  property, made to enforce the payment of money
• Examples in real estate include mortgages, tax
  liens, and mechanics liens
• Generally, if the financial claim is not paid
  the lien holder may sue to have the property
  sold at public auction with the proceeds of the
  sale being used to satisfy the debt
• In any event, the lien runs with the propertyand
  encumbers future owners

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Easements

• An easement is a right given to one party by a
  landowner to use the land in a specified manner
• An easement may exist in any portion of the real
  estate, including the air space above or a
  right-of-way across the land
• The easiest way to understand how easements work
  is by considering an example

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Easements
Easement in gross
Appurtenant easement
Parcel A
Parcel B
Servient estate
Dominant estate
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He Can Take My Land?!?

• If an individual takes possession and uses real
  estate as if it were his own, eventually he may
  file an action in court to claim title through
  adverse possession
• To do this, the use must be
• Open and notorious
• Continuous and uninterrupted
• Actual and exclusive
• Hostile
• Adverse to the true owners possession

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Externalities andLand-use Controls

• One of the key attributes of real estate is that
  land uses are interdependent
• Economic zoning is the phenomenon of similar land
  uses agglomerating in one area
• This interdependence can distort private land-use
  decisions Externalities
• Negative spillover effects
• Positive spillover effects
• Land-use controls are implemented to resolve
  these spillover effects

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Restrictive Covenants

• Restrictive covenants, also referred to as deed
  restrictions, are private agreements that affect
  the use of land

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Restrictive Covenants

• Deed restrictions can be used to govern the type,
  size, or design of improvements, as well as
  impose other limitations on the use of the
  property

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Restrictive Covenants

• Deed restrictions must pass a reasonableness test
  and be compatible with applicable federal and
  state laws

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Restrictive Covenants

• Because they are private contracts, deed
  restrictions are enforced by private court actions