Kap Real Estate Chapter 6: Land-Use Controls

Question 1

Police Power of the States

1) Define

2) Methods they use

Answer 1

capacity of the states to regulate behavior and keep order, welfare, morals, health and safety intact on their land

-planning
-zoning
-subdivision regulations
-building codes
-environmental protection legislation

Question 2

master plan aka general plan

1) definition

2) couple examples

Answer 2

The primary method by which local governments recognize development goals is through the formulation of a comprehensive master plan

-land use, including standards of population density and economic development;

-public facilities, including schools, civic centers, and utilities;

-circulation, including public transportation and highways;

-conservation of energy and natural resources; and
noise abatement.

Question 3

Zoning ordinances

1) What are they?

2) What types of things do they regulate?

Answer 3

An exercise of police power by a municipality to regulate and control the character and use of property. The provisions of the master plan are implemented by zoning ordinances.

Laws that regulate things like:

-permitted uses of each parcel of land,
-lot sizes,
-types of structures
-building heights,
-setbacks (the minimum distance away from streets or sidewalks that structures may be built),
-style and appearance of structures,
-density (the ratio of land area to structure area), and
-protection of natural resources

Question 4

Zoning is ________ based.

Answer 4

local

Question 5

What types of things do zoning ordinances regulate?

Answer 5

Laws that regulate things like:

-permitted uses of each parcel of land,
-lot sizes,
-types of structures,
-building heights,
-setbacks (the minimum distance away from streets or sidewalks that structures may be built),
-style and appearance of structures,
-density (the ratio of land area to structure area), and
-protection of natural resources

Question 6

Zoning powers are conferred on municipal governments by the _____ _________ _______ ________ through the __________ __________.

Answer 6

North Carolina Enabling Act

the General Assembly

Question 7

Cluster Zoning

Answer 7

allows developers to provide a varied selection of lot sizes and housing choices within a single area

Question 8

Nonconforming Use (zoning)

Answer 8

Nonconforming use can apply to the way the land is used, the type of structure that is on the property, the way the structure is used, or even the lot size itself. For instance, a small factory building may be the last one left in a neighborhood that was once industrial but has since been zoned for residential use.

Question 9

Conditional Use Permit (special use permit)

Answer 9

Written governmental permission allowing a use inconsistent with zoning but necessary for the common good, such as locating an emergency medical facility in a predominantly residential area.

Question 10

Variance

Answer 10

sought to allow a deviation from an ordinance due to unique circumstances

under highest and best use, it is in the public interest to put land to use rather than have it lie fallow. To get a variance, the property owner must prove that there is no other reasonable use for the property and the property owner will suffer a substantial hardship if the variance is not granted. The hardship also must not have been created by the property owner.

Question 11

Overlay Districts and Zones

Answer 11

An overlay zone is superimposed over an existing zone and can modify use of the original zone

Question 12

historic preservation zoning

Answer 12

Zoning to preserve the historic nature of a particular property or neighborhood. Change will require a certificate of appropriateness from the necessary regulatory power

Question 13

Aesthetic Zoning

Answer 13

Zoning ordinances that regulate the appearance of real property, such as exterior color, exterior construction material, required screening and fencing.

Exterior surfaces of structures being restricted to a particular color palette or construction material would be an example of aesthetic zoning.

Question 14

What is Spot Zoning?

4 Characteristics

Answer 14

treatment of a single property in a manner inconsistent with the treatment of similar properties in the area

(1) the size of the rezoned area—rezoning a single lot is more questionable than rezoning multiple tracts;
(2) the degree of compatibility of the different zoning with the government’s adopted plans for the area;
(3) the impact of the rezoning on the landowner(s), neighboring landowners and the surrounding community;
(4) the degree of difference between the zoning of the surrounding area and the new zoning for the tract(s) in question.

Question 15

subdivision

Answer 15

A tract of land divided by the owner, known as the subdivider, into blocks, building lots, and streets according to a recorded subdivision plat, which must comply with local ordinances and regulations.

Question 16

plat map

Answer 16

A map of a town, section, or subdivision indicating the location and boundaries of individual properties.

Question 17

What are the 4 steps for creating a subdivision process?

Answer 17

1. Initial planning stage
2. Final planning stage
3. Disposition start-up
4. Final plat approval

Question 18

Interstate Land Sales Full Disclosure Act

1) What is the act?

2) What does the Act exempt?

3) What does the law require the developer to do?

Answer 18

1) The law requires those engaged in the interstate sale or leasing of subdivision lots (including condominiums, cooperative units, and campsites) to file a statement of record and register the details of the land with HUD.

2) The Act exempts the sale of lots in a subdivision containing fewer than 25 lots or to those in which each lot is 20 acres or more. Lots offered for sale solely to developers also are exempt from the Act’s requirements, as are lots on which buildings exist or where a seller is obligated to construct a building within two years. Interstate sales or leasing activities include out-of-state mailers, newspaper ads, television advertising directed to out-of-state buyers, and out-of-state telephone solicitation. Brokers involved in interstate selling of lots across state lines that come under this Act should seek legal advice to ensure full compliance.

3) requires the developer to furnish prospective buyers or lessees with a property report containing all essential information about the property, such as distance over paved roads to nearby communities, number of homes currently occupied, soil conditions affecting foundations and septic systems, type of title a buyer receives, and existence of liens.

Question 19

Property report

Answer 19

The mandatory federal and/or state documents compiled by developers to provide potential purchasers with material facts about a property prior to its purchase

-distance over paved roads to nearby communities,
-number of homes currently occupied,
-soil conditions affecting foundations and septic systems,
-type of title a buyer receives, and
-existence of liens.

Question 20

building codes

Answer 20

a set of rules that specify the minimum acceptable level of safety for constructed facilities

Question 21

building permit

1) What is a building permit?

2) What happens if you don’t secure a building permit and build anyways?

Answer 21

Permission from the appropriate local government authority to construct or renovate any type of property.

Not securing a building permit can make the property uninsurable for hazard insurance purposes until the oversight has been rectified. Some municipalities will allow retroactive approval of permits; some will require total removal of the improvement or repair. Unpermitted space may be included in heated living square footage quoted by real estate brokers, though the lack of a necessary permit must be disclosed as a material fact to all parties.

Question 22

certificate of occupancy (CO)

Answer 22

Once the completed structure has been inspected and found satisfactory, the building inspector issues a certificate of occupancy (CO)

Question 23

What does a complete septic system contain?

Answer 23

A complete septic system includes a septic tank, a septic drain field, and associated piping

Question 24

If the seller learns that the tract is not suitable for any onsite system, the seller ____ or ______ choose to disclose this fact to prospective purchasers. It may also influence the seller’s decision as to whether the seller wishes to sell now or wait until community or municipal septic service becomes available. However, if a ______ learns then they are _______ to share whether it is suitable or not.

Answer 24

may or may not

broker

required

Question 25

_______ should verify what type of septic system, if any, serves the property, and the number of _________ that are permitted before making any representations. Brokers should also take caution regarding the advertising of __________ levels in properties for sale or rent. The advertised limits may exceed the design parameters of the onsite sewage system improvement permit issued for a particular property. Brokers must be alert to these _______ and occupancy limits in the sale and resale of all properties or lots requiring onsite sewage disposal systems–not just new homes or homes under construction.

Answer 25

Brokers

bedrooms

occupancy

bedroom

occupancy

Question 26

A broker should be informed about any use ________ on particular lands with which he is dealing. Thus, a broker who advertises that a property “sleeps 16” should be certain that any ___________ is in fact designed to serve at least 16 people. Similarly, a _______ who advertises a property for sale as having a certain number of bedrooms should be sure that any onsite sewage system is permitted to handle that number of bedrooms or risk being disciplined by the Real Estate Commission.

Answer 26

restrictions

onsite sewage system

broker

Question 27

Some county health departments offer septic _______ records online, whereas in other counties, brokers must contact the _________ for assistance in obtaining copies of septic _______.

Answer 27

permit

health department

permits

Question 28

Brokers should also assist property owners and prospective purchasers in determining what kind of septic system is on the premises as well as the _________ and _________ of the system. It is not easy to find a septic tank. The first thing to do is contact the local heath/zoning office to see if it has a plan on record. Even if a drawing exists, it may not match exactly what is in the ground. Determining who installed the system may also be helpful. Brokers should provide guidance as to where location information can be found regarding the location of the septic tank.

Answer 28

location

functionality

Question 29

The existence of straight-piping is a ———- and must be disclosed by a ——— to everyone—owner, buyers, tenants, and lenders—if the broker knows or —– —– know about it.

Answer 29

material fact

broker

reasonably should

Question 30

Straight piping (illegal) is what?

Answer 30

is where wastewater is discharged directly into the yard or into a nearby creek or stream, rather than into any approved treatment system. Straight-piping is illegal because state law requires that any person owning or controlling a residence, place of business or place of public assembly must discharge all wastewater directly to an approved wastewater system for that specific use.

Question 31

Federal Emergency Management Agency (FEMA) designates

Answer 31

designates flood hazard areas

FEMA produces maps of those area and requires insurance under the National Flood Insurance Program (NFIP)

Question 32

Standard home owners policies _________ flood

Answer 32

DO NOT COVER

Question 33

Real estate brokers should inform any __________ of possible flood areas and have them review the latest version of the flood maps compiled by the Army Corps of Engineers

Answer 33

potential buyers

Question 34

Highway Access Restrictions

Answer 34

Realtor should make sure that public roads access is available. If any streets are being added to the neighborhood, realtor is to notify the client

-If any government entity takes away road access, the owner must be compensated under eminent domain.

Question 35

Americans with Disabilities Act (ADA)

Answer 35

Legislation passed in 1990 that prohibits discrimination against people with disabilities. Under this Act, discrimination against a disabled person is illegal in employment, transportation, public accommodations, communications and government activities.

Question 36

The federal government has recently mandated that new commercial buildings and older public buildings that undergo __________ must meet the standards of the Americans with Disabilities Act (ADA). The purpose of this legislation is to facilitate accessibility and mobility by ramp construction, safety rails, wider doors, and other accommodations.

Answer 36

remodeling

Question 37

Private land-use controls

Answer 37

The regulations of land use by individuals or nongovernment organizations in the form of deed restrictions and restrictive covenants.

The most common examples of private land-use controls are the restrictions imposed by subdivision developers. All those who purchase lots in a subdivision promise to abide by the developer’s restrictions, which usually include provisions requiring regular property maintenance and restrictions on parking, fences, architectural details, et cetera.

Question 38

Declaration of restrictive covenants

Answer 38

A statement of all covenant, conditions and restrictions affecting a parcel of land; sometimes noted on the plat map or in a separate document. Restrictions are appurtenant and aim to protect property values.

Question 39

restrictive covenant now called protective covenant

Answer 39

“Protective covenants are enforceable conditions that restrict the manner in which an owner may use his/her property” (1997-1998 Update Course). The term protective covenant is a more modern term and better implies the intended use, which is to protect owners from uses that may have an adverse effect on value or enjoyment.

Note that deed restrictions can be more restrictive on an owner’s use than zoning ordinances. When zoning and covenants are in conflict, the more restrictive of the two takes precedence.

Question 40

NCBA/NCAR 2-T Offer to Purchase and Contract (restrictive coveneants)

Answer 40

suggests that the purchaser should review restrictive covenants, if any, plus any governing documents for the subdivision or any established owners’ association, as part of the buyer’s due diligence:

If the Property is subject to regulation by an owners’ association, it is recommended that Buyer review the completed Residential Property and Owners’ Association Disclosure Statement provided by Seller prior to signing this offer. It is also recommended that the Buyer determine if the owners’ association charges fees for confirming owners’ association information and restrictive covenant compliance.

Question 41

North Carolina Real Estate License Law

Answer 41

a licensee has a duty to avoid any misrepresentation regarding permitted land use, to recognize potential land use problems, and an affirmative duty to discover and disclose any such problems:

1) A broker must avoid any representation about a property’s zoning or permitted land uses without verifying the property’s zoning and, if appropriate, flood hazard area maps and any restrictive covenants affecting the property.

2) A broker is expected to be able to recognize “red flag” situations regarding land use issues, advise the parties involved of the potential problem, and recommend that the interested parties verify the permitted land uses. Recognizing and taking appropriate action with regard to potential problems with restrictive covenants is particularly important.

3) A broker is expected to be able to recognize patent signs of flooding on a property or when a property’s location may make it susceptible to flooding (e.g., location near a river or creek). A broker should assist the parties with locating and reviewing the FEMA maps or checking with the local planning office to determine if there is any potential flooding problem.

4) A broker is expected to be aware of planned major highway or public transportation changes in the area where the agent works and to disclose such information when appropriate.

Question 42

Which of the following should be discoverable in a search of the public records?

A) Rights of any party in possession

B) Easements

C) Encroachments

D) Inaccurate surveys

Answer 42

B) Easements

When a title examination is conducted, the title examiner lists each instrument in chronological order, along with information relative to taxes, judgments, special assessments, surveys, easements, and the like.

Question 43

A valid will devises the decedent’s real estate after the payment of all debts, claims, inheritance taxes, and expenses through

A) the administrator of the estate.

B) the court action known as probate.

C) the granting clause established in the will.

D) the law of intestate succession.

Answer 43

B) the court action known as probate

Probate is a formal proceeding to prove or confirm the validity of a will and to pay all debts, claims, inheritance taxes, and expenses before the decedent’s real property passes to persons identified in the will.

Question 44

The recorded history of all matters that affect the title to a specific parcel of real property is

A) a chain of title.

B) an abstract of title.

C) a certificate of title.

D) a title insurance policy.

Answer 44

B) an abstract of title

An abstract of title is a full summary of all recorded matters affecting title, disclosing those items about the property that are of public record.

Question 45

A buyer wanting to make sure title to the property is protected from others having priority of interests would

A) record the deed.

B) use a general warranty deed.

C) sign and have the deed acknowledged.

D) purchase a mortgagee’s title policy.

Answer 45

A) record the deed

A grantee who does not record a deed risks having the unrecorded interest become subordinate to a claim by a third party.

Question 46

A title insurance policy is designed to protect the insured against events that

A) occur as a result of the policyholder’s actions.

B) occur in the years following policy issuance.

C) occurred before the policy was issued.

D) occurred before the time period researched for the title search.

Answer 46

C) occurred before the policy was issued

A title insurance policy protects the insured against acts occurring before the policy was issued. Title insurance protects the policyholder against a loss from some event that has already happened.