Limits to Property Rights: Regulations & Conflicts

Instructor: Shawn Grimsley

Shawn has a masters of public administration, JD, and a BA in political science.

Just because you own real estate does not mean you can do anything you want on it or with it. In this lesson, you will learn about some of the legal limitations imposed on an owner's real property rights.

Limits to Property Rights In General

Private property rights are a cornerstone of the American legal and economic system. But it is important to understand that there is no such thing as an absolute right to own a particular piece of property or use it any way you want. For example, the government, through its power of eminent domain, can take property for a public purpose so long as it fairly compensates the owner pursuant to the Fifth Amendment to the US Constitution. Likewise, local, state and federal laws and regulations limit how a property owner can use real property. Let's take a closer look at some of the key statutory laws and regulations.

Police Powers - Zoning & Building Codes

One of the most important restrictions facing owners of both residential and commercial property involves the state's police power. You can think of the police power as the power of a state to restrict private rights for the benefit of the general welfare of the public. However, it's important to note that a local government, such as a city or county, does not have inherent police powers. Instead, the state government must delegate the authority to enact laws pursuant to its police power to local government. Zoning ordinances are a perfect example and are one of the most important local restrictions placed on real estate.

Zoning ordinances dictate how you can and cannot use a piece of real estate that falls within a specific geographic region, known as a 'zone'. For example, a city may enact zoning ordinances for residential zones, commercial zones, and industrial zones. If you own property in a residential zone, you can't put up a factory there because factories may only be placed in an industrial zone. Likewise, a zoning ordinance may prevent a house being built in an area zoned for commercial use, while retail stores, malls, and restaurants are perfectly acceptable in commercial zones.

Another important regulation of private property is building codes. In a nutshell, building codes regulate how buildings and other structures are designed, built, maintained, repaired, renovated, and inspected. The policy purpose is to ensure that the structures constructed on real property are safe for the owner, people who visit the property, and the public in general.

Environmental Laws & Regulations

Another important restriction placed on property rights are environmental laws and regulations that may be enacted at the federal, state, and even local level. Environmental regulations address issues such as water quality, air quality, soil quality, and solid waste. For example, environmental regulations prevent factories from polluting as much as they may want and ensure that lead paint and asbestos is removed safely from buildings.

Nuisance Claims

Another type of limit on property rights involves nuisance law. There are actually two different types of nuisances. A private nuisance is a tort (i.e., a civil wrong) where a property owner's use of their property substantially interferes with another property owner's use or enjoyment of his or her own property. For example, you may decide to file a nuisance claim if your neighbor refuses to stop holding loud parties every night, preventing you and your family from sleeping.

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