The government retains certain rights no matter who is on the deed. In fact, if you look back at an abstract far enough, most of original conveyances came from the United States government via a “patent.”. This document, in Iowa is generally for 40-acre sections signed by Franklin Pierce. In the end, the uncomfortable truth that we don’t always contemplate is that our rights of property ownership are derived from and there for are controlled by, the government. Of course, the government is supposed to be by the people so we are really granting ourselves rights. right??
Here is a look at some of the government powers.
Police Power: Zoning ordinances and building codes that promote the health, safety, or the general welfare of the public. Zoning can be easily defined as the government’s ability to enact regulations to reasonably control land use. It could be an ordinance requiring mowing of grass; in the country it might be soil conservation rules requiring owner to terrace property; statute authorizing destruction of diseased cattle without compensation; ordinance prohibiting ownership of dangerous/vicious animals. Sometimes zoning can’t be enforced so you need to get a variance from a board of adjustment. In Iowa, what was once an easy process is now being tightly construed that in order to get a variance, no other economic value can occur. For example, construction of a pergola less than 30 feet from the curve is something that has been routinely allowed by a board of adjustment, but under Iowa supreme court rulings, not having a pergola isn’t depriving a landowner of all economic use and is therefore not a hardship, so the variance should not be granted. The impact on the surrounding properties also considered. Note, zoning on ag land is pretty limited but the county can stop using the ag designation as a shield to get around rules against subdividing ground int buildable lots in the county for residential use.
Eminent Domain: Eminent Domain provided for in 5th Amendment to the Federal Constitution. It prohibits the government from taking private property for use without just compensation for the owner. The eminent domain clause is also known as a taking’s clause. An explicit taking is the classic example is if a landowner will not voluntarily sell property to the state to build a highway, so the state uses its eminent domain powers to obtain the property and provide the owner with “just compensation.” An implicit taking occurs when the government regulation indirectly causes a result that has the same effect as an explicit taking. An example would be if an owner bought land to develop it, but then shortly later, the government banned new development in that area. The resulting process from eminent domain power is called condemnation.
Taxation: Taxation can affect real estate in two ways the taxes that are assessed against the real estate or other taxes (i.e. income tax, sales tax) that becomes a lien on the property due to the owners’ debt. When real estate taxes remain unpaid, the property can be sold at tax sale.
Escheat: This is the process by which property reverts back to the state (or county) in cases where an owner dies without heirs and without a will or where the property is abandoned. Since the government granted the rights in the first place, they built in a feature to allow them to reclaim the rights granted if nobody else can claim them.
Statutory Interests in Property
- Homestead: Iowa law defines a homestead as the land that is owned and occupied as the family home; it is limited to up to ½ acre within a city plat or up to 40 acres in the country.
- Exemption: A homestead is exempt from most judgments. See Iowa Code §561.21 A process is required to clear any judgements from the homestead to show the world they have not attached to the homestead.
Spouse’s Involvement: It takes one to buy property and two to sell if you are married in Iowa. There are a few exceptions for spouses not on the deed:
- if the spouse already relinquished homestead rights and statutory share rights in another instrument (i.e. POA).
- if their interest was terminated by an order of the court (i.e. divorce decree).
- if their right to recovery is barred by a statute of limitations (typically 10 years under Iowa Code §614.15).
- if the document is an encumbrance that is a purchase money mortgage as defined by Iowa Code §654.12B.
- if a court enters a decree holding that invalidating such a document would unjustly enrich the non-signing spouse.
- Dower/Curtesy: The terms dower (wife’s right) and curtesy (husband’s right) refer to a person’s right to his/her spouse’s property. Note: Although today these rights apply equally to men and women, I will be using an example where the husband dies, and the wife is the surviving spouse for ease of explanation.
- If Husband dies without a will and his own children are also the children of his wife, then Wife is entitled to all Husband’s real estate and personal property. See Iowa Code §633.211. Of course, if the Wife’s name was on title as a joint tenant, this would be a non-issue, so these rights are invoked when Wife is not on title or is not on title as a joint tenant.
- Even if Husband dies with a will or dies with a child who is not also his Wife’s child, the Wife is entitled to take what is known as an “elective share,” which is 1/3 of all the real property and personal property. See Iowa Code §633.238. Part of the elective share includes the homestead or so much as would be equal to the share necessary, unless the Wife would want a different arrangement. In lieu of any share in the real estate, the Wife may instead elect to retain the homestead for life as long as it is actually used as a home by the Wife. See Iowa Code §561.12.
- Freehold Estates:
- Definition: Freehold estates are interests in land in which ownership is for an indeterminate amount of time.
- Fee simple absolute: This is the “highest” (most complete) interest in real estate. The holder is entitled to all the rights in the property. This is commonly shortened to just “fee simple.”
- Defeasible fee estate: Two different types of defeasible fee estates are when the holder has a fee simple absolute title that may be lost upon the occurrence (or non-occurrence) of a certain event.
Fee simple on condition precedent (a/k/a fee simple determinable): This type of ownership has certain language which will cause the estate to end automatically (i.e. “so long as,” “until,” “while,” “during,” etc.).
- Example: Olivia to Prairie Lakes Church so long as the premises are used for a church.
- Example: Olivia to Abigail in fee simple so long as she does not marry again.
- In both these instances, the grantee has a fee simple determinable, and the remaining interest is called possibilities of reverter, which is the right of the grantor to the parcel upon breach of the condition.
- However, any such possibilities of reverter are extinguished 21 years from recording of the deed creating these interests unless the claimant filed a verified claim in the recorder’s office. Lowers v. United States, 663 N.W. 2d 408 (Iowa 2003).
Fee simple on condition subsequent: This type of ownership has certain language which will cause the estate to end if the prior owner enforces the issue (i.e. “upon condition,” “but if,” or “provided,” etc.).
- Example: Olivia to Prairie Lakes Church on the condition that the property is used for church purposes and if it is not used for church purposes, then Olivia reserves the right to re-enter and re-take.
- Executory Interest: In either of these examples, the prior owner can essentially “assign” his/her ability to a third party, which is called an executory interest. So, for example, Olivia to Abigail but if the property is used for a gas station, then to Tex. Tex would have the executory interest.
- Fee simple on condition precedent (a/k/a fee simple determinable): This type of ownership has certain language which will cause the estate to end automatically (i.e. “so long as,” “until,” “while,” “during,” etc.).
- Life Estate: A life estate is an interest in real or personal property that is limited in duration to the lifetime of its owner (or another designated person/persons).
- Classic Example: Olivia to Abigail for life, then to Tex. Abigail has a life estate and Tex has a vested remainder
- Pur Autre Vie Example: Olivia to Abigail for the life of Tex. Abigail has a life estate for the life of Tex. This is called a “pur autre vie,” which is a life estate measured by the life of a person other than the grantee.
- Fee Tail: A fee tail estate was abolished in Iowa over 130 years ago. Fee tail language like “O to A and heirs of her body” would not be interpreted to be refer to heirs who are the lineal descendants but not adopted of the grantee. See Skogg v. Frdell, 332 N.W. 2d 333 (Iowa 1983); Pierson v. Lane, 14 N.W. 90 (Iowa 1982). (If you encounter this in an abstract, I’ll buy you a cup of coffee!).
- Non-Freehold Estate: A non-freehold estate is a lease where the tenant has the exclusive right to possess real estate during the term of the lease. See Iowa Code §622.32(3). Leases will be discussed in more detail in a future module.
- Adverse Possession: Adverse possession involves a change in legal ownership to real estate without any payment and against the wishes of the titleholder of record. This is different than squatters’ rights but will be discussed in detail in a future module.
- Background: There are a variety of encumbrances shown in the public records that reflect someone other than the owner of record has a right or interest relating to the property. This might include easements, leases, mechanic’s liens, mortgages, fixture filings, judgment liens, tax liens, covenants and the list goes on. This outline is only going to highlight a few of these encumbrances (easements, fixtures, liens and covenants).
- Discriminatory Restrictions on Land Use: Federal and state law provide certain types of zoning and covenant.
- Federal: The federal Fair Housing Act prohibits discrimination in the selling, renting, lending or insuring of residential property on the basis of race, color, religion, gender, disability, family status or national origin.
- State: States may provide additional protections of protected categories. For example, Iowa Code §216.8 adds sexual orientation to the list of protected classes.
- City: Cities likewise can provide even additional protections of protected categories. For example, Iowa City adds marital status as a protected category.
- KEY: Local governments can always provide more protections than the federal law but can never remove categories from the federal law.
- Easements: An easement is a non-possessory right to enter and/or use the land in the possession of another; it obligates the possessor not to interfere with the uses authorized by the easement. Restatement (Third) of Property: Servitudes 1.2(1) (2000). An easement is different from license, which is the right to enter property for a specific purpose where the right can be revoked at any time.
Creation: An easement can be created in several different ways:
- Prescription (Adverse Possession): A court can create an easement via adverse possession as described elsewhere in this outline and in other modules. See Iowa Code §564.1.
- Implication: A court will imply an easement where 1) previous use was apparent and 2) the parties expected the use would survive division because it is reasonably necessary to one of the parcels.
- Necessity: A court will create an easement where 1) there is a necessity and 2) the two parcels immediately previously had the same owner. Unlike an easement by implication, an easement by necessity is only available to the immediate parties to the transaction (i.e. a grantor conveys a landlocked parcel and easement must be granted to grantee to give access to the public road).
- Grant: Private parties can create an easement by putting the terms in writing—by granting one another certain rights. The easement must be recorded if it is to be enforceable against future parties. See Iowa Code §622.32(3).
- Easement by Estoppel: A court will imply an easement when the claiming party has expended substantial amounts of labor/money in reliance on consent or an oral agreement that is now disputed.
Types of Easements:
- Easement apparent: This type of easement is the most classic example. A servient estate gives usage to the dominant estate. In other words, a non-landlocked parcel would give usage to a landlocked parcel. This type of easement “runs with the land” which means it continues in perpetuity to future purchasers of either parcel.
- Easement in gross: An easement in gross belongs to a specific person and typically does not “run with the land” (except for some commercial easements).
- Negative easements: Negative easements (sometimes known as air, light, or view easements) are being used with increasing popularity to ensure undesirable construction does not occur that blocks a view. Zoning and covenants can also provide some protections.
- Solar energy users may petition administrative review boards if an adjoining landowner refuses to negotiate a solar access easement. See Iowa Code Chapter 564.
- Small wind energy systems are able to connect with electric utilities throughout the state. See Iowa Code §476.48.
- Just because there are windows overlooking land will not allow for an easement for light and air. See Iowa Code §564.2.
- Notice: While express easements are subject to the recording acts, the purchaser of the servient estate (the one GIVING the usage) is required to provide notice of the easement. If an easement is recorded, it is binding on all subsequent purchasers for value without actual notice.
- Extent of Easement Disputes: An easement owner may not use the easement for the benefit of additional land. The easement owner has the duty to maintain and repair the easement. The property owner can use the easement to the extent such use does not interfere with the easement owner’s use. If property owners share use of private roads as ways of necessity, then all owners shall be required to contribute equally to maintenance (unless agreed otherwise in a recorded document).
- Fixtures: A fixture is an item of personal property that has become part of the real property on which it is situated.
- No single factor determines whether something is personal property or real property, but rather here are the tests:
- Annexation Test: Can the item be removed without damage to the surrounding property?
- Adaptation Test: Has the item been adapted to the surrounding property?
- Intention Test: Was the intention of the parties for the item to stay with the property?
- A fixture passes with title to real property (whereas personal property does not).
- A creditor may file a fixture filing to create a security interest in fixtures. See Iowa Code §554.9502 and §554.9102. (Example: A homeowner has a water softener installed and is going to pay for it in monthly payments. The installer has the homeowner sign a security agreement which the installer files as a UCC financing statement which then become a lien on the property).
- Whether or not an item is a fixture can become an issue during a mortgage foreclosure because a homeowner who is foreclosed upon may not remove fixtures from the property.
- There are special categories of fixtures that are typically involved in leases (i.e. installed by the tenant at the tenant’s expense). Ideally the lease will specify the conditions surrounding these items.
- No single factor determines whether something is personal property or real property, but rather here are the tests:
- Liens: Each of these four types of liens will be discussed in detail in future modules, but the below is an overview.
- Judgments (Iowa Code 624.23): Any judgment against a titleholder becomes an automatic lien against any real estate owned by the judgment debtor.
- Mechanic’s Liens (Iowa Code 572): A mechanic’s lien may be necessary to secure payment from a homeowner for services that furnish materials or labor for a building or improvement on the property.
- Tax Liens (26 USC 6321, Iowa Code 450.7, Iowa Code §422.26 and many others): Not surprisingly, unpaid federal or state taxes of many different varieties can become a lien on real estate.
- Mortgages: A mortgage is a voluntary conveyance of a security interest in land, intended by the parties as collateral for repayment of a debt.
- Covenants: A covenant is a promise to do (or not do) something relating to the land.
- How is it not an easement? It does not convey a property interest, but rather it is a contractual limit or promise about land.
- What about zoning? If zoning and a covenant are in conflict, the zoning regulation will prevail.
- What is required? In order to be enforceable, a covenant must be created by the grantor and must be in writing (i.e. satisfy the Statute of Frauds). Today, covenants are routinely filed with subdivision plats to protect all of the property in the subdivision. See Iowa Code §558.11 and Iowa Code §558.41.
- The Doctrine of Equitable Servitudes: Even without recorded restrictions, there can be restrictions implied in deeds when there is a clear pattern or scheme of development. This doctrine has been imposed when in a residential subdivision, restrictions were contained in prior deeds conveyed by a common grantor, but some subsequent grantees were given deeds containing no such restrictions. If at the inception of subdivision, there was a common scheme of development and the unrestricted lot holders had notice of the common scheme, a court will imply those restrictions into the deeds of unrestricted lot holders. The building restrictions are viewed as a protection of the property owner and the public, rather than a restriction on use. In a subdivision, they protect property values by increasing the desirability of those lots as residences.
- Length of Time: Covenants, whether filed as a part of a subdivision plat or filed independently, are typically valid for 21 years from the recorded date. Covenants can be extended for an additional 21 years if a verified claim is filed before its expiration. See Iowa Code §614.24. (Note: A subdivision plat may contain covenants and restrictions that are not “use” restrictions. Any non-use restriction will survive beyond the 21-year deadline and will exist indefinitely). Covenants with illegal portions are invalid and unenforceable as to that portion (i.e. racially restrictive covenants are invalid but would not automatically invalidate remaining covenants within the same document).
- Creation: An easement can be created in several different ways: