Lesson 6: Public Restrictions on Land - Metro Brokers

1

Lesson 6:Lesson 6:Public Restrictions Public Restrictions

on Landon Land

Real Estate Principles of Georgia

1261 of 49

© Copyright 2006, Rockwell Publishing, Inc.

IntroductionPrivate property ownership is affected by public restrictions on land (land use controls):

comprehensive planszoning ordinancesbuilding codessubdivision regulationsenvironmental laws

Also affected by government’s powers of eminent domain and taxation. 126


Land Use ControlsPolice power

Police power: State’s constitutional power to adopt laws necessary for protection of public’s health, safety, morals, and general welfare.

Allows government to place restrictions on owner’s use of private property.Delegated by federal to local governments.

126

2


Land Use ControlsConstitutional limitations

Land use regulation must:1. have a reasonable relationship to public

health, safety, morals, general welfare2. not discriminate between similarly

situated property owners3. not reduce property value so much that

regulation amounts to confiscation4. prevent harm to the public that

prohibited use of property would cause

Land use regulation must:1. have a reasonable relationship to public

health, safety, morals, general welfare2. not discriminate between similarly

situated property owners3. not reduce property value so much that

regulation amounts to confiscation4. prevent harm to the public that

prohibited use of property would cause126


Land Use ControlsTypes of land use controls

Comprehensive plansZoningBuilding codesSubdivision regulationsEnvironmental laws

127


Land Use Controls Comprehensive planning

General plan: Comprehensive development plan, prepared by city or county (also called master plan).

Plan should:set long-range development goals ensure land is developed in orderly fashionaddress population density, building intensity, housing, traffic patterns, transportation systems, noise control, etc.127

3


General plan is implemented by city and county governments through zoning ordinances and other land use regulations.

General plan is implemented by city and county governments through zoning ordinances and other land use regulations.

Types of Land Use ControlsComprehensive planning

Types of Land Use ControlsComprehensive planning

127


Land Use ControlsZoning

Zoning ordinance: Divides community into land use zones, with only certain types of uses allowed in each zone.

Areas zoned for incompatible uses may be separated by undeveloped areas (buffers).

Areas with overlay zoning permit a mixture of different uses in a specific area.

127


Modern zoning laws typically have numerous subcategories.

R 1: allows detached single-family housesR 2: also permits row houses and duplexesR 3: also permits apartments and condominiumsR 4: permits any type of housing, including mobile homes

ZoningUse categories

128

4


Zoning is enforced through building permits, which are required before a structure is built or altered.

Failure to comply with permit requirements may result in fines and other penalties.

ZoningEnforcement

128


Zoning ordinances may:set minimum lot sizeslimit building heightrequire minimum distances from property lines for buildings (setback and sideyard rules)limit how much of the lot can be covered by a building

ZoningLand use limits

129


ZoningZoning exceptions

Special provisions for exceptions to zoning:

nonconforming usesvariancesconditional uses

Community Center

129

5


Zoning ExceptionsNonconforming uses

Nonconforming use: Existing use that becomes a violation when new zoning is imposed.

Requiring nonconforming uses to be immediately brought into compliance would:

cause excessive financial hardshipdiscourage land development

129


Nonconforming uses are usually allowed to continue with restrictions. But they cannot be:

expandedrebuilt after destructionresumed after abandonment

Zoning ExceptionsNonconforming uses

129


Zoning ExceptionsVariances

Variance: Authorization to build structure or use property in a way that is generally prohibited.

Used where enforcement of zoning would result in substantial harm to owner without providing any real public benefit.

129

6


Owner can apply to local zoning authority for a variance.

Must show severe practical difficulties or undue hardship (won’t be granted just to increase profit).Variance usually authorizes only minor deviation.

Zoning ExceptionsVariances

129


Zoning ExceptionsConditional uses

Conditional use: Zoning authority may issue special permits for certain uses that are inconsistent with overall zoning, but necessary or beneficial to community.

Examples: schools, hospitals, churches, and cemeteries.

Conditional use: Zoning authority may issue special permits for certain uses that are inconsistent with overall zoning, but necessary or beneficial to community.

Examples: schools, hospitals, churches, and cemeteries.

130


Zoning ExceptionsRezoning

Property owner may apply for amendment of zoning ordinance.

To get a rezone:public hearing must be held and surrounding landowners notified

130

7


Zoning ExceptionsSpot zoning

Spot zoning: Zoning/rezoning a parcel of land differently from the surrounding properties.

Illegal in many jurisdictions.

130


Zoning vs. Private RestrictionsGeneral rule: When private restrictions and zoning laws conflict, the more restrictive requirement must be met.

130


SummaryLand Use Controls

Police powerGeneral planZoningNonconforming use

VarianceConditional useRezoneSpot zoning

8


Land Use ControlsBuilding codes

Building codes:establish minimum standards for constructionrequire builders to use particular methods and materialsprotect public against dangers caused by unsafe design, substandard materials, or poor workmanship

130


Building CodesConstruction inspections

Once building permit is issued and construction begins, inspector can stop work on project if it conflicts with plans or building codes.After construction is completed, finished building is inspected; certificate of occupancy issued if every aspect of building complies with codes.Not in compliance – stop work (abatement)

Once building permit is issued and construction begins, inspector can stop work on project if it conflicts with plans or building codes.After construction is completed, finished building is inspected; certificate of occupancy issued if every aspect of building complies with codes.Not in compliance – stop work (abatement)

131


Land Use ControlsSubdivision regulations

● Subdivision: Division of parcel of land into two or more parcels or lots.

● Traditional subdivision: separately-owned lots with single-family homes

● Common interest developments (condos and PUDs) are also subdivisions.

131

9


Subdivision RegulationsProcedural laws

When land is subdivided, a preliminary plat map must be approved by city/county officials before work begins.

Plat map contains specific requirements for utilities, streets, sidewalks, etc.

131


Subdivision RegulationsImpact Fees

A municipal assessment against new residential, industrial, or commercial development projects to compensate for the added costs of public services generated by the new construction. Such indirect service requirements would be to cover hook-up costs for water and sewer lines.

131


Interstate Land Sales Full Disclosure Act: federal consumer protection law that applies to subdivisions offered for sale or lease in interstate commerce.

Generally applies to subdivisions with 25 or more vacant lots.

Subdivision RegulationsILSFDA

131

10


Requires developers to register with HUD. Deliver to buyers a property report with disclosures.Provides cooling off period (right of rescission)

Subdivision RegulationsILSFDA

131


Non Residential Developed lotsLots of 5 acres or moreSubdivision with < 50 lotsSubdivision which improved lots or improved within 2 yearsSubdivision where inspected by buyerCemetary lots

Subdivision RegulationsILSFDA Exceptions

132


Summary Building Codes and

Subdivision RegulationsBuilding codesBuilding permitsProcedural lawsConsumer protection lawsILSFDAFloodplain restrictions

11


Federal and state environmental laws can impact ways in which a private property owner can use land.

Environmental Laws

132


Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA): Addresses liability for environmental cleanup costs.

Current owners may be liable for cleanup even if they didn’t cause contamination.

Environmental LawsCERCLA

132


SummaryEnvironmental LawsCERCLANEPA Pollution control laws

12


Public Restrictions on LandEminent domain

Eminent domain: Power of government to take private property for public use, upon payment of just compensation to the owner.

May be used to help implement general plan.

133


Government first offers to buy the property.

If owner refuses to sell or demands too high a price, government can file condemnation lawsuit and force a sale at fair market value.

Public Restrictions on LandEminent domain

133


Public Restrictions on LandTaxation of real estate

Three types of real estate taxes:

1. General real estate taxes2. Special assessments3. Conveyance taxes

General Assessments

Conveyance

134

13


Public Restrictions on LandGeneral real estate taxes

General real estate taxes are taxes on ownership of real property.

Used to pay for government operating costs and services.Determined based on property’s value.

Also called ad valorem taxes (ad valorem is Latin for “according to value”). 135


General Real Estate TaxesAssessment

Assessment: Valuation of property by city or county assessor’s office to determine tax basis.

Owners may appeal assessment to board of appeal/review.

135


General Real Estate TaxesTax rates

Taxing body sets tax rate annually by:

adopting budget to determine needed tax revenue, andpassing law authorizing taxation (appropriation).

135

14


General Real Estate TaxesTax rates

Tax rate often expressed in mills: one mill equals one-tenth of one cent ($.001).

Rates also expressed in dollars per hundred or dollars per thousand.

Tax rate often expressed in mills: one mill equals one-tenth of one cent ($.001).

Rates also expressed in dollars per hundred or dollars per thousand.

1/100 1/1000135


General Real Estate TaxesCollection

Taxes are levied annually, although payments may be spread over the year.

Property tax year is not necessarily the same as the calendar year.

PAY

TAXES

136


General Real Estate TaxesForeclosure

Typically a lien attaches automatically to property when taxes are levied and remains in force until taxes are paid.

If taxes aren’t paid, penalty, notice of impending default, and tax sale may follow.

LIEN

136

15


General Real Estate TaxesForeclosure

Delinquent taxpayer may redeem property before sale. Right of redemption.

Otherwise, buyer at tax sale receives certificate of sale and eventually a tax deed.

In Georgia, 1 year for taxpayer redemption then foreclosure

136


General Real Estate TaxesExemptions

Property tax exemptions: publicly owned property, property used for religious purposes, and property owned by certain nonprofit organizations.

Partial exemptions: owner-occupied homes and homes owned by veterans, senior citizens, and the disabled.

136


TaxationSpecial assessments

Special assessment: Tax levied against properties benefiting from public improvement (also called improvement tax).

Creates lien against taxed property.

137

16


Special assessments differ from general real estate taxes:

One-time chargePay for a particular project, not ongoing government operationsLevied only against properties that benefit from the projectTax based on project’s cost, not property’s valueProperty owners may pay in installments

TaxationSpecial assessments

137


TaxationTransfer tax

Transfer tax: Tax on conveyances of real property based on the selling price (also called excise or conveyance tax).Payment of tax is usually seller’s responsibility. No transfer tax is paid on amount of assumed loan.$.10 per $100

137


TaxationIntangible Tax

Intangible Tax: Tax on any new loan acquired for the financing of real property.

Payment of tax is usually Buyer’s responsibility.$1.50 per $500

138

17


SummaryEminent Domain and Taxation

Eminent domainCondemnationGeneral real estate taxesForeclosureSpecial assessmentsTax exemptionsTransfer tax

Documents

Lesson 6: Public Restrictions on Land - Metro Brokers