Chapter 7 - Land Use Controls and Regulations

Question 1

What is the background to the feudal system?

Answer 1

Was introduced to England following French invasion by Willaim the Conqueror (around 900 AD). King owned everything and gave manors to barons - who were lords of the manor and pledge fielty to the king. Barons had own laws, money, and taxes. The gave land to knights who would give military service to the king when needed and protection to barons. Villeins were poor and little more than slaves (to knights). “Freeman” were few and far between and were more like tradesmen

Question 2

What is the allodial system background?

Answer 2

America is a version of this where all land is considered private and free from the government (but government does have considerable control over the land). The Treaty of Paris (1783) ended formal hostilities and recognized American independence. Government has right to tax citizens

Question 3

What are transfer taxes?

Answer 3

Sometimes referred to as conveyance taxes, revenue stamps, documentary stampes, or deed stamps. A state tax based upon value of real property when sold. Paid by seller based on declaration value

Question 4

What are recording fees?

Answer 4

State established charge for recording docs in the public records of the county

Question 5

What are property taxes?

Answer 5

A state tax based on assessed value of RE (land + improvement) where county assessor determines value of property and informs the owner of market value. State establishes an assessment ration which is an artificial lowering of market value Land is usually appraised separately from home improvements (home/structure) since it doesn’t appreciate/depreciate as homes do

$MV x AR% = $AV
$AV x TR% = $Tax

Property taxes are always calculated annually

Question 6

What are special assessments?

Answer 6

Assessments levied against property for special improvements, like sidewalks, street lights, landscaping of public areas, etc. Levied against properties that directly benefit. Property taxes are tax deductible, but not special improvement taxes

Many entities like government, religious, hospital, or educational institutions are exempt from taxes. There may be special tax rates for certain groups, like veterans or senior citizens

Government entities have the right to lien a property for not paying taxes. They get first priority over other liens

Question 7

What is the concept of escheat?

Answer 7

Based on concept that all land within the boundary of a state should be owned by someone. If a person dies with no one in will or heirs living at their death, the property will pass to the state. The state will receive the property and sell it - with proceeds going to the General Education Fund

Question 8

What is eminent domain?

Answer 8

Part of the 5th Ammendment to the Constitution where personal property cannot be seized by the governement without compensation. The government must provide a proof of test payment is made and private owner must be provided due process

Question 9

What is the process of condemnation?

Answer 9

The process of taking property, while the payment for the property is normall referred to as a condemnation award

Some local governments take “underwater” homes through condemnation/eminent domain

Question 10

What are police powers (in terms of gov)?

Answer 10

The right to regulate for the benefit of the general health and welfare of citizens. Such as zoning, building codes, health regulations, traffic laws, and family law

Question 11

What are enabling acts?

Answer 11

General rule that regulation of land within borders is a function of the state. Over time, became ineffective and was passed on to local governments were decisions were made for communities

Question 12

What is a master plan?

Answer 12

A plan developed by a local government (city or county) where needs ot the community are taken into account. Such as needs for orderly growth and should be able to get a good idea of what needs are

Question 13

What is zoning?

Answer 13

Where a government establishes what uses a given parcel of land can have. The main ordinances are:

• agricultural
• residential
• commercial
• industrial
• government

Residential zoning contains density levels, which describe number of dwellings per size of parcel, normally stated as so many housing units per acre

Question 14

What is Non-Conforming Use (NCU)?

Answer 14

Usually happens when a property is put to a given use and, as community grows around it over time, it would no longer be permitted in that zoning area. Would be an acception and grandfathered in. Can keep until:

1) use is discontinued (could not be restarted without zoning approval)
2) structure is destroyed
3) use is expanded
4) ownership changes

Question 15

What are variances?

Answer 15

A request for some leeway in using a parcel which violates zoning regulation. If a family wanted to add on to their house and would be 13 feet from proprety line, but zoning requires a 15 foot setback

Question 16

What is a conditional use permit (CUP)?

Answer 16

If there is not a specific zone and would like to put something there (like a hospital wanting to put a parking lot in an unused part of a residential zone)

Question 17

What is spot zoning?

Answer 17

Often labeled by opponents to the proposed use as being illegal (although it isn’t). Represents zoning authority’s decision to rezone a small area in a zone differently from surrounding parcels

Question 18

What is a setback?

Answer 18

The required distance between structures. Typically, single family dwellings need 5 to 7 foot side yard setbacks. This is so if a house catches fire it is harder to set other houses on fire

Question 19

What are buffer zones?

Answer 19

Required zones to separate between conflicting uses. A housing development may need a buffer zone (park) between it and an industrial zone

Question 20

What is up zoning and down zoning?

Answer 20

If additional uses are added to zones available for a property, it is worth more value and considered an up zone. The opposite would be for a down zone

Question 21

What is height and density zoning?

Answer 21

Zoning regulation on the height of a structure or density of a parcel

Question 22

What are subdivision regulations?

Answer 22

Minimum standards for subdivisions - like street widths, sidewalk provisions, and street lights

Question 23

What are reasons for building codes?

Answer 23

Often varying from region of the country to another and based on circumstance of the area. Miami would need hurricane codes, while Louisiana might need flood codes

Question 24

What are reasons for health codes?

Answer 24

Provide minimume standards for matters like handling food, sanitation standards, etc.

Question 25

When is most legal burden for disclosure of hazards and environmental issues?

Answer 25

Most legal burden arises when properties are transferred and real estate salespeople must be alert to environmental hazards and local/state/fed laws

When confronted w/ environmental issues, need to involve professional specialists, who have knowledge of abatement processes and associated costs

Question 26

What are environmental protection laws?

Answer 26

Laws from the federal gov or local and state agencies to promote a clean and safe environment

Question 27

What is CERCLA and SARA?

Answer 27

Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) established a Superfund to clean up hazardous waste sites and to collect the costs from certain responsibile persons associated with the sites

Superfund Amendment and Reauthorization Act (1986) clarified regulations regarding hazardous waste and limited liability for some parties, including innocent landowners and RE brokers

Question 28

What are some hazardous materials that an agent should be familiar with?

Answer 28

1) Asbestos - found in insulation and in ceiling and floor tiles. Was widely used in residential and commercial buildings. Removal is very expensive and inhalation can lead to fatal lung disease
2) Lead - can be found in plumbing pipes in older homes
3) Lead-based paint - can be found in homes built prior to 1978. Review “Disclosure of Info on Lead-Based Paint and/or Lead-Based Paint Hazards” in appendix to know what should be disclosed
4) Urea formaldehyde foam insultion (UFFI) - has been used in insulation in residential and commercial buildings. Ingestion and inhalation is dangerous
5) Leaking underground storage tanks (LUST) - can be in older gas stations where ground water can get contaminated
6) Mold
7) Radon - an odorless, colorless, radioactive gas produced naturally by radioactive materials in ground
8) Electromagnetic fields (EMFs) - fields generated by movement of electrical currents, like power transmission lines
9) Carbon monoxide (CO) - colorless and odorless gas that’s a byproduct of burning certain types of fuels

Question 29

Must agents disclose CICs and CC&Rs? What information?

Answer 29

Yes

1) by buying a home, buyer agrees to restrictions in CC&Rs
2) buyer is told they will have to pay owner assessment fees (monthly dues - HOA)
3) if buyer fails to pay assessments, the CIC has right to foreclose and take owners home
4) by buying home, you may become a member of the HOA which can limit how you enjoy your property
5) the owners are required to tell prospective buyers that the community is a CIC
6) as a homeowner in a CIC, owner has rights guaranteed by state. Might include right to be notified of all meetings, right to audit financial records, etc.

Some cases, the disclosures are more stringent when a contract has been signed and require the seller to purchase a resale package - which is given to the buyer w/ 5-10 days to read and approve the contents. Can be 200-300 pages long

Question 30

What are master planned communities?

Answer 30

Some communities and subdivisions have superseded by master planned communities, which take the subdivision idea a step further

Some areas have master planned communities that are nested together (master planned community inside of a master planned community inside of another one)

Question 31

What are CC&Rs?

Answer 31

Restrictions put in place by planned use development docs, HOA controlled projects, etc.

Can be very restrictive and is a material fact, that would need to be disclosed to prospect buyer