Real Estate Vocab: Eminent Domain
Eminent Domain is the government's power to take private property for a public use. The government's legal right to exercise this power is through condemnation. In order for private property to be taken, the property owner is owed "just compensation" for their property. These instances can be seen with school boards, railroads and utility companies taking property to benefit the community in some way. Instances that do not benefit the public cannot be taken.
Real Estate Vocab: Police Power
While Eminent Domain actually takes property away from private owners, Police Power restricts uses. Police Power is the government's right to protect the public be enforcing laws that have to do with health, safety and welfare. Examples of Police Power is zoning, building codes and fire codes. Zoning usually varies by municipality and restricts land uses based on residential, commercial or industrial properties. Zoning must be in line with the overall plan to promote property values and be consistent with current uses as well as promote environmental, cultural and economic benefits. If a use is dubbed "nonconforming", the use was legal before current zoning codes and, therefore, can continue unless the owner is paid in full for the value of their land. Once the use ceases, however, it cannot be continued. Because land is not actually being taken, no "just compensation" is due to property owners affected by Police Power's restriction of use.
Real Estate Vocab: Escheat
When an owner dies without a will and there are no heirs, the property is close to abandonment. In order to prevent abandoned property, however, the government practices Escheat, in which land is given back to the government.
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