Washington Real Estate Fundamentals
Lesson 5:
Public Restrictions on Land
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Public Restrictions on Land
Introduction
Private property ownership affected by public
restrictions on land:
 land use control laws
 power of eminent domain
 taxation
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Land Use Controls
Police power
Basis for land use control laws: police power.
Police power: State’s power to impose laws
necessary for protection of public health,
safety, morals, and general welfare.
 Allows government to regulate owner’s
use of private property.
 State delegates police power to local
governments.
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Land Use Controls
Constitutional requirements
To be constitutional, land use regulation must:
 be reasonably related to public health,
safety, morals, or general welfare
 be nondiscriminatory
 not reduce property value so much that
regulation amounts to confiscation
 protect public from harm
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Land Use Controls
Types
Land use control laws include:
 comprehensive planning laws
 zoning ordinances
 building codes
 subdivision regulations
 environmental laws
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Land Use Controls
Comprehensive planning
Comprehensive plan: Long-term development
plan adopted by local government.
 Also called general plan or master plan.
 Often prepared by planning commission.
 Addresses issues such as:
 population density
 building intensity
 transportation
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Comprehensive Planning
Implemented by zoning
Community’s general plan implemented by:
 police power
 power of eminent domain
Zoning can’t conflict with general plan.
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Comprehensive Planning
Growth Management Act
In Washington, local planning governed by
Growth Management Act.
 Requires new development to be
concentrated next to existing urbanized
areas, to reduce sprawl.
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Land Use Controls
Zoning
Zoning ordinance: Law that divides
community into land use zones, with only
certain types of uses allowed in each zone.

Separates residential, commercial,
industrial, and agricultural uses.

Areas zoned for incompatible uses may
be separated by undeveloped areas
called buffers.
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Zoning
Use categories
The zones created by zoning laws usually have
subcategories.
 Example: residential zone divided into
single-family, one-to-four unit buildings, and
multi-family.
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Zoning
Other rules
Zoning ordinances often:
 establish minimum lot sizes
 limit building heights
 set setback and sideyard rules (minimum
distances from property lines for buildings)
 limit how much of lot building can cover
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Zoning
Other rules
Cluster zoning: Zoning ordinance may allow
developments to have smaller lot sizes and
setbacks in exchange for providing more shared
green space.
 Allows higher density.
 Called planned unit developments or rural
cluster developments.
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Zoning
Exceptions
Generally must apply zoning law in same
manner to all property owners within zone.
But some exceptions or changes to rules
allowed:
 nonconforming uses
 variances
 conditional uses
 rezones
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Zoning Exceptions
Nonconforming uses
Nonconforming use: Existing building or use
that doesn’t comply with new zoning.
Nonconforming uses are generally
“grandfathered in” and allowed to continue.
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Nonconforming Uses
Restrictions
Although allowed to continue, nonconforming
uses can’t be:
 expanded
 rebuilt after destruction
 resumed after abandonment
Property can be sold, but new owner subject
to same restrictions.
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Zoning Exceptions
Variances
Variance: Special authorization to build
structure or use property in way that is
generally prohibited.
 Owner required to show that law creates
undue hardship or practical difficulties.
 Usually only minor deviation authorized.
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Zoning Exceptions
Conditional uses
Conditional use: Use inconsistent with
neighborhood’s zoning that is allowed under
specified conditions.
 Examples: school, hospital, place of
worship, cemetery
 Conditions address parking and other
issues, to mitigate impact on
neighborhood.
 Also called a special exception.
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Zoning
Rezones
Rezone: Amendment of zoning ordinance.
Property owner may request rezone.
 May have to show circumstances have
changed since zoning adopted.
 Public hearing must be held and
surrounding landowners notified.
Downzoning: Area rezoned more restrictively.
Upzoning: Area rezoned less restrictively.
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Summary
Planning and Zoning
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Police power
Comprehensive planning
Growth Management Act
Zoning
Cluster zoning
Nonconforming use
Variance
Conditional use
Rezone
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Land Use Controls
Building codes

Establish minimum standards for
construction.

Require builders to use particular
methods and materials.

Protect public against dangers caused by
unsafe design, substandard materials, or
poor workmanship.
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Building Codes
Permits
Compliance with building codes:
 carried out through building permit system
 enforced by building inspectors
Finished building inspected, and certificate of
occupancy issued if every aspect of building
complies with codes.
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Building Codes
Older properties
Owners may be required to bring old buildings
“up to code” when new rules imposed.
But if an older structure is protected as
historical landmark, separate building code
usually applies.
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Land Use Controls
Subdivision laws
Local governments also implement general
plans by regulating new subdivision
development.
Subdivision: Division of one parcel into
two or more parcels.
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Subdivision Laws
Two types
Two types of subdivision laws:

Local laws concerning procedures for
getting subdivision plans approved.

Consumer protection laws requiring
developers to make disclosures to lot
buyers.
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Subdivision Laws
Subdivision approval procedures
Counties set requirements for physical
aspects of subdivisions.

Access roads, utilities, lot size, etc.

Developer must submit proposed plat
map to county for approval.

Plat must also be submitted to city if:
 property within city limits
 property within one mile of city
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Subdivision Approval
Plat map requirements
Plat map must have:

legal description of land to be subdivided

provisions for required statutory
dedications (for streets, open space, etc.)
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Subdivision Approval
Changes may be required
City or county may approve plat as submitted,
or require changes.

Subdivider can’t sell any lots until plat is
approved.
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Subdivision Laws
Consumer protection laws
Consumer protection laws regarding
subdivisions include state law and federal law:

Washington Land Development Act

Interstate Land Sales Full Disclosure Act
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Subdivision Laws
Washington Land Development Act
Requires subdivision developers to make
disclosures to prospective buyers.

Applies to sale or advertising of 26 or
more unimproved lots to general public
as part of common promotional plan.

Applies to any subdivision promoted in
Washington, even if property outside
state.
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Land Development Act
Public offering statement
Subdivision developer must give buyers
public offering statement disclosing:
 liens and other encumbrances
 property’s physical condition
 compliance with land use laws
 warranties
Buyer has right of rescission for two days
after receiving statement.
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Subdivision Laws
ILSA
Interstate Land Sales Full Disclosure Act:
Federal law affecting sale or lease of vacant
lots across state lines.

Anti-fraud protections: for subdivisions with
25 or more unimproved lots.
 Require disclosures, prohibit misleading
sales practices.

Registration: for subdivisions with 100 or
more unimproved lots.
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Summary
Building Codes and Subdivision Laws
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Building codes
Building permit
Certificate of occupancy
Subdivision approval procedures
Plat map
Washington Land Development Act
Public offering statement
ILSA
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Land Use Controls
Environmental laws
Environmental laws: Laws intended to preserve
the physical environment.
 May be federal, state, or local.
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Environmental Laws
Shoreline Management Act
Shoreline Management Act: State law
protecting shorelines by regulating development
within 200 feet of high water mark.
 Applies to coastal shorelines, shores of
larger lakes and streams in Washington.
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Environmental Laws
NEPA
National Environmental Policy Act: Requires
environmental impact statement (EIS) before
federal government undertakes project with
significant impact.
 EIS also required for private uses or
developments that must have federal
agency approval.
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Environmental Laws
SEPA
State Environmental Protection Act: State law
similar to NEPA. Requires EIS for projects
with significant environmental impact.
 Applies to projects by state or local
governments.
 Also applies to private projects that
require approval of state, county, or city
agency.
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Environmental Laws
CERCLA
Comprehensive Environmental Response,
Compensation, and Liability Act: Federal law
concerning liability for environmental cleanup
costs.
 Enforced by federal Environmental
Protection Agency (EPA).
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CERCLA
Landowner’s liability
If property contaminated with hazardous
waste:
 CERCLA may require current owner to
pay for cleanup
 even if contamination caused by
previous owner or tenant
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Environmental Laws
Environmental hazards
Agents should be aware of dangers posed by:
 asbestos
 urea formaldehyde
 radon
 lead-based paint
 underground storage tanks
 illegal drug manufacturing
 mold
 geologic hazards
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Summary
Environmental Laws
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CERCLA
NEPA
Environmental impact statement
SEPA
Shoreline Management Act
Environmental hazards
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Public Restrictions on Land
Eminent domain
Eminent domain: Power of government to
take private property for public use.
 Government must pay owner just
compensation (fair market value).
Government may delegate power of eminent
domain to companies that provide public
service (utilities, railroads).
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Eminent Domain
Condemnation process
Condemnation: Process for exercising power
of eminent domain.
 Government first offers to buy property.
 If owner refuses to sell or demands too
high a price, government files
condemnation lawsuit.
 Court will condemn property and order it
to be sold to government at fair market
value.
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Eminent Domain
Comparison with police power
Eminent domain is government’s right to take
private property for public use.
Police power is government’s right to regulate
private property for public good.
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Public Restrictions on Land
Taxation of real property
Three types of real property taxes:

General real estate taxes

Special assessments

Real estate excise tax
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Taxation of Real Property
General real estate taxes
General real estate taxes: Annual taxes on
real property, used to pay for government
operating costs and services.
 Amount of tax owed based on property’s
value.
 Also called ad valorem taxes
(“according to value”).
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General Real Estate Taxes
Tax assessment
Assessment: Valuation of property for tax
purposes.

Must be assessed at 100% of “true and
fair” value (market value).

Real property in Washington assessed
each year on January 1.

Owner can appeal assessment to county
Board of Equalization.
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General Real Estate Taxes
Payment and default
Taxes levied in October of each year, payable
the following year.

Half due by April 30, half by October 31.

County can foreclose when taxes have
been delinquent for three years.

Owner can redeem property before sale
by paying delinquent taxes, interest, and
other accumulated costs.
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General Real Estate Taxes
Exemptions
Exempt from taxation (examples):
 publicly owned property
 property used for church purposes
 nonprofit hospitals and schools
There are also some partial exemptions.
 Example: low-income homeowners who
are 61 or older, or retired due to
disability.
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General Real Estate Taxes
Open space
Land that qualifies as open space eligible for
assessment at value as currently used (rather
than its value if developed).

Results in lower assessment.

Provides incentive to preserve property
as open space instead of developing it.

Example of how taxation can be used for
land use control.
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Taxation of Real Property
Special assessments
Special assessment: Tax levied against
properties benefiting from public improvement
(such as street paving).

Also called improvement tax.

Can usually be paid in installments.

Creates lien, so government can foreclose
if assessment not paid.
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Taxation of Real Property
Comparison
General Real Estate Taxes
Special Assessment
 Pay
 Pays
for ongoing services
 Levied
against all
non-exempt property
for one project
 Levied
only against
properties that benefit
 Levied
annually
 One-time
 Based
on property value
 Based
charge
on cost of
project and benefit
received
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Taxation of Real Property
Real estate excise tax
Real estate excise tax: Tax on sale of real
property, based on selling price.
Current rate:
 1.28% of selling price owed to the state
 additional percentage owed to local
government; amount varies by city or
county
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Real Estate Excise Tax
Payment of excise tax
Seller legally responsible for payment of tax.
 But tax collected when buyer’s deed
recorded.
 Deed won’t be recorded unless tax paid.
 Also, failure to pay tax creates lien
against property.

So buyer must be sure to collect excise tax
from seller at closing.
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Summary
Eminent Domain and Taxation
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Eminent domain
Condemnation
Just compensation
Ad valorem taxes
Assessment
Tax exemption
Special assessment
Real estate excise tax
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