Public Restrictions on Real Estate

There are public restrictions on real estate in addition to the private restrictions that I have listed and explained in my previous blog post.  Public restrictions include taxation, eminent domain, police power, and escheat.

1. Property Tax:  The government has the right to levy taxes on the owner of any property.  Property tax is one of the two biggest forms of government revenue production.  This tax is an ad valorem tax in that it is levied as a percentage of value.  These percentages are expressed in milage rates.  The government first must assess the value of your property as a taxation reference point.  The assessment is an estimate of the property's market value.  The government then moves on to developing a budget and tax rate.  Finally, the government must bill property owners and collect taxes from them.
2. Power of Eminent Domain:  Under eminent domain, the government has the right to acquire a piece of land for public use, even if the owner does not want to sell.  The property owner is allowed just compensation for the seizure of their land.  The condemnation process is where the government explains what the property will be used for, and determines a monetary value to use as just compensation for the land to the owner.  Both the definition of public use and just compensation are quite vague, and can vary severely.  Click this link to read a real life story about property seizure.   
3. Police Power:  Police Power gives the government the power of regulation, which gives them the ability to protect the public health, safety, morals, and general welfare.  This basically allows the government to implement land use restrictions that are put in place to benefit the public as a whole.  The interdependence of properties surrounding a given piece of property and their uses greatly affects decisions made under police power.  The comprehensive general plan is put in place by a city as guideline for community development.  The following pieces are typically included: an analysis of projected economic development and population change, a transportation plan to provide for necessary circulation, a public-facilities plan that identifies such needed facilities as schools, parks, civic centers, and water and sewage-disposal plants, a land-use plan, and an official map.  Zoning is one of the biggest key pieces of the plan.  This police power is the process of dividing a community's land into districts in which only certain uses of the land are allowed.  Zones are typically classified as residential, commercial, or industrial.  Mandatory dedications, impact fees, and takings are enforcement tools used by cities.  
4. Escheat:  This government restriction prevents real estate from becoming unowned in the unlikely event a landowner dies without a valid will or living relatives.  The government takes over the property in the event this happens.  

Although the government has the power of many of the private land restrictions I have described in my previous blog post, the powers I have listed and described above are additional powers the government has regarding real estate regulation.