Limitations on Ownership Rights
This web page introduces legal concepts to illustrate that landowners do not have unlimited flexibility in how they use their land.
Limits on use or ownership of land
Property law defines limitations on how owners can use their land. For example, how large of a hole (e.g., as a surface mine, underground mine, or a basement for a building) can owners dig on their land and how close to the property line can the landowner digs the hole? The legal answer is "[e]ach coterminous owner is entitled to the lateral and adjacent support which that owner's land receives from the adjoining land, subject to the right of the owner of the adjoining land to make proper and usual excavations on the same for purposes of construction on using ordinary care and skill, taking precautions to sustain the land of the other, and giving previous reasonable notice to the other of the intention to make such excavations." N.D.C.C. §47-01-18. Restated, a landowner cannot dig a hole so large or so close to the property line that it will cause the neighbor's land to slide into the opening. This statute, based on common law principles, illustrates that a landowner does not have unlimited rights to how they use their land.
Zoning: Local government imposing limits on the use of private land
Governments, especially local governments based on authority granted by state government, also impact or limit how owners can use their land. For example:
- N.D.C.C. §11-33-01. "County power to regulate property. For the purpose of promoting health, safety, morals, public convenience, general prosperity, and public welfare, the board of county commissioners of any county may regulate and restrict within the county ... the location and the use of buildings and structures and the use, condition of use, or occupancy of lands for residence, recreation, and other purposes ... "
- Note: the legislature defines county zoning authority so it aligns with the general definition of police power, implying that as long as the zoning regulation complies with the statute, imposing the zoning ordinance will not be a "taking" that requires compensating the affected landowner.
- Additional North Dakota Statutes defining government zoning authority
- N.D.C.C. §11-33-03. Object of regulations.
- N.D.C.C. §11-33-07. County planning commission to prepare plan.
- N.D.C.C. §11-33-18. Power of board of county commissioners to issue permits...
- N.D.C.C. §11-33-02(2) ...regulate the nature and scope of concentrated feeding operations..
- 2. A board of county commissioners may regulate the nature and scope of concentrated feeding operations permissible in the county; however, if a regulation would impose a substantial economic burden on a concentrated feeding operation in existence before the effective date of the regulation, the board of county commissioners shall declare that the regulation is ineffective with respect to any concentrated feeding operation in existence before the effective date of the regulation.
- 3. A regulation may not preclude the development of a concentrated feeding operation in the county. A regulation addressing the development of a concentrated feeding operation in the county may set reasonable standards, based on the size of the operation, to govern its location.
- How do these legislative directives to the counties relate to the limitations set forth by the U.S. Supreme Court in Lucas v. South Carolina? HINT -- what is the legal significance of the statutory language of "substantial economic burden", "may not preclude the development", and "may set reasonable standards"? SECOND HINT -- the U.S. Supreme Court in the Lucas case wrote "Regulations that deny the property owner all "economically viable use of his land" constitute one of the discrete categories of regulatory deprivations that require compensation..."
- Also see N.D.C.C. §11-33-22 requiring that any zoning regulation of a concentrated animal feeding operation be filed with the North Dakota Department of Health.
- Additional North Dakota Statutes defining government zoning authority
- N.D.C.C. §11-33-13. Not to affect use.
- This statute authorizes the local government to allow an existing use to continue after a new zoning ordinance is enacted. For example, an operating factory would now violate a new zoning declaration that directs the land can be used only for retail stores. This statute also allows the local government to make an exception (grant a variance) for a land use that existed before the new zoning ordinance was enacted.
- N.D.C.C. §11-33-14. Nonconforming uses regulated.
- Even though granted a variance, the local government can regulate non-complying uses.
- N.D.C.C. §11-33-08. Hearings.
- N.D.C.C. §11-33-16. Enforcement.
- N.D.C.C. §11-33-11. May adjust enforcement.
- This statute authorizes the local government to allow exceptions or variances for land uses. This statute could be applied when the non-complying use is proposed after the zoning ordinance was created.
- Note how this statute differs from N.D.C.C. §11-33-13 (introduced above). Section 11 deals with situations where the non-complying land use arises after the zoning ordinance was created; section 13 deals with situations where the land use existed before the zoning ordinance was adopted.
- N.D.C.C. §11-33-17. Violation of zoning regulations and restrictions - Remedies.
- N.D.C.C. §11-33-21. General penalties for violation of zoning regulations and restrictions.
- N.D.C.C. §11-33-12. Appeals to district court.
- Each of these statutes clarifies the county's zoning authority; often the statutory limitations help assure that the local government actions do not violate the landowner's constitutional protections.
- Remember -- the local government officials, such as county commissioners, township officers, and city commissioners, are your friends and neighbors that you and others have elected to these positions. In fact, YOU may be one of those local elected officials with the responsibility of limiting the activities of private landowners. Decisions, such as zoning, are not made in the state capitol or in Washington, D.C; they are not made by the courts; they are made by those chosen by the voters to be the community leaders.
- Government is not they; it is us!!
- In summary, a zoning ordinance is a limitation on land use that is established and enforced by a local government.
- A frequent question is "what happens when a city grows and a land use that was previously acceptable is now no longer acceptable as a neighbor to the recently expanded community". For example, would a feedlot need to cease operation because a city has grown onto land adjacent to the feedlot?
- Note, this question is partially addressed by N.D.C.C. §11-33-13 (introduced above); but there will be times when a existing non-complying use cannot be tolerated. What is the solution in that case?
- A new zoning ordinance that outright prohibits continued operation of the feedlot (i.e.., the current business) would likely be a "taking" that entitles the landowner (the feedlot operator) to be compensated. That can be a costly proposition; no city can afford to buy all existing businesses that are encroached on by a growing city. Yet, the city needs room to grow.
- An infrequent alternative has been to specify a future time when the operation must cease. This time allows the business operator to recover some of the current investment in the business facilities, thus permitting the local government to escape the legal consequence that the "zoning was a taking".
- This practice could be summarized as "granting a variance for an existing use with the condition that the variance will expire at a designated future time."
- Example: "Two medical marijuana dispensaries that opened outside Colorado Springs city limits before El Paso County commissioners established land use regulations nearly a year ago, and have been in violation of zoning laws, can continue to operate in their current locations – for now. Commissioners on Tuesday approved zoning variances for Front Range Farmacy doing business as Top Buds, and Cannabis Therapy Center. But commissioners put conditions on the duration of the variances, which could possibly force one or both to relocate in the future. After testimony from dispensary owners, employees, medical marijuana patients and a lawyer, Front Range Farmacy was granted a five-year variance. Cannabis Therapy Center received a one-year variance."
Source: http://www.gazette.com/articles/zoning-108502-dispensaries-established.html#ixzz17uhjU8Bl; November 2010.
- Does North Dakota law allow county government to impose an expiration date on a variance for an existing use? See N.D.C.C. N.D.C.C. §§11-33-11, 11-33-13, 11-33-14. The answer is probably yes.
- An alternative approach is to conduct land-use planning; but even land-use planning requires an implementation strategy that is likely to include zoning. See N.D.C.C. §11-33-07.
Covenants running with the land:
- Property owners also can impose limitations on the use by subsequent owners (see N.D.C.C. §47-04-24 et. seq.). A restrictive covenant limits how the current owner can use the land; generally, the limitation is enforced by owners of adjacent land; it is not the same as Fee Simple Determinable or Fee Simple Subject to Condition Subsequent because violation of a covenant does not take the land away from the current owner; instead, the owners of land that is subject to a covenant will be required to bring their land use into compliance with the covenant. An example may be limits on how I paint or remodel the exterior of my townhouse.
"The plaintiffs and the defendants own separate tracts of land in a rural subdivision of Beulah called Country Club Estates. The plaintiffs have filed an action alleging that each of the defendant landowners, by constructing a 401 by 601 metal building on his lot in the subdivision, violated the following restrictive covenant:" Allegree v. Jankowski, 355 N.W.2d 798 (N.D. 1984)
- A covenant running with the land differs from a zoning ordinance in that zoning is imposed by a government entity (such as the city, township, or county), whereas a covenant is imposed by a previous owner.
- Covenants are binding on all subsequent owners and this can have unexpected or undesired results. It is for this reason that legislatures want covenants to include provisions on how they can be modified. For example, see N.D.C.C. §47-04-25.1.
- To preserve open spaces and production agriculture, some states are prohibiting (by statute and regulation) landowners from converting their agricultural land to non-agricultural uses. Other states allow private entities to acquire/purchase the landowner's "development rights;" that is, the "sticks in the bundle" that permit the landowner to develop non-agricultural uses. Once the owner no longer has the development rights, the owner has no alternative but to leave the land agricultural/undeveloped.
- See Vermont's AGRICULTURAL LAND DEVELOPMENT RIGHTS ACQUISITION PROGRAM at Vermont Statutes Title 6, Chapter 2.
- In summary, a restrictive covenant is a limitation on land use that was established by a previous owner of the land, but that is enforced by neighbors who received land from the same previous owner with the same restrictions or limitations.
Limits on Corporate Farming:
- North Dakota: corporations and limited liability companies cannot engage in farming nor own farm land (N.D.C.C. §10-06.1-02) except:
1. if all shareholders in a closely-held corporate or members of a limited liability company are related (N.D.C.C. §10-06.1-12);
2. if the business is a cooperative corporation wherein 75% of the owners are North Dakota farmers and ranchers who live on the land or depend principally on farming or ranching for their livelihood (N.D.C.C. §10-06.1-08);
3. certain lending institutions, coal mining companies, nonprofit organizations, and developers (N.D.C.C. §§10-06.1-06, -07, -09, -24(5)).
- But see SD Farm Bureau v. Joyce Hazeltine -- "Section 21 of Article XVII of the South Dakota Constitution, prohibiting corporations or syndicates from acquiring or obtaining an interest in land used for farming and from otherwise engaging in farming South Dakota, violates the Dormant Commerce Clause and is unconstitutional [emphasis added]." United States Court of Appeals for the Eighth Circuit, August 19, 2003.
- Also see Jones v. Gale -- Nebraska's “Initiative 300” which prohibits corporations from acquiring any title to real estate used for farming or ranching in Nebraska and from engaging in farming or ranching violates the Commerce Clause of the U.S. Constitution and the Americans with Disabilities Act. United States District Court for Nebraska, December 15, 2005.
- Decision was affirmed by 8th Circuit in January 2007 on the basis that the language of the Nebraska Constitution "violates the dormant commerce clause both on its face and based on its discriminatory intent."
- See National Agricultural Law Center "Corporate Farming Law" at http://www.nationalaglawcenter.org/readingrooms/corpfarming/.
Limits on Alien Ownership of North Dakota ag land
- Only U.S. citizens, Canadian citizens, and permanent resident aliens may acquire an interest in North Dakota agricultural land. This state law, however, provides an exception for individuals who entered the United States solely to develop and direct a dairy operation with no more than 640 acres of agricultural land as long as the individuals
- have invested or is in the process of investing a substantial amount of capital;
- reside in this state for at least ten months out of every year; and
- actively participate in the operation of the agricultural land.
- (source: N.D.C.C. §47-10.1-02)
- U.S. federal law does NOT prohibit foreign investment in U.S. agricultural land, but it does require that any foreign person who acquires or transfers an interest in agricultural land must report the following information to USDA within 90 days after the transaction:
- name and address of the foreign owner;
- citizenship (if an individual); or the nature of the legal entity (if not an individual), the country in which the foreign entity was created, and the principal place of the foreign business;
- the type of interest in the U.S. agricultural land;
- the legal description and acreage of the U.S. agricultural land;
- the purchase price;
if the foreign person transfers an interest: the legal name and address of the transferee, citizenship of the transferee (or nature of the legal entity, the country in which the transferee was created or organized, and the principal place of business of the transferee if not an individual);
the agricultural purposes for which the foreign owner intends to use the land; and
the date on which the report was submitted.
- Source: 7 U.S.C. 3501
Summary of Key Points
A property owner's rights (sticks in the bundle) can be limited in several other ways.
- Zoning can be described as "local government limiting how owners can use their property." Such a limitation could also be described as "removing a stick in the bundle," but as long as the zoning ordinance fits within the scope of a proper exercise of police power (that is, it was done to promote the health, safety and general well-being of the community), the ordinance will not be considered a taking that would require compensation.
- Landowners can impose limitations on subsequent landowners. Restrictive covenants are often imposed by urban housing developers when they divide a tract of land into housing lots and sell the lots to numerous new home owners. The purpose of the restrictive covenant is to impose a limitation on all the new owners (such as, you must get approval from the neighbors before you can paint your house a different color). The goal is to protect the neighborhood from one owner doing something to their home that would detract from the value of all the homes. The restrictive covenant is not enforced by the seller/developer, nor is it enforced by local government (because local government has not been involved). Instead, it is enforced by the neighbors who bought a lot from the same developer and are subject to the same restriction. Thus, even though I do not have a direct agreement with my neighbor, they have a legal right to limit my activities on my land because our common seller imposed a limitation on all of us.
- The North Dakota laws limiting ownership of agricultural law by corporations and aliens are probably not "removing a stick from the bundle of property rights," instead, they might be better described as removing a stick from a person's bundle of rights. Even though the law impacts property ownership, these laws address the rights of individuals.
- Are you ready to also think about individuals as having a bundle of rights, such as the right to vote, the right to own property, the right to marry, the right to ... and the list goes on. For example, is each right protected by the Bill of Rights in the Constitution (the first ten Amendments) defining sticks in each of our individual bundle of rights, such as the right to peaceful assembly, the right to bear arms, the right to not have a religion forced upon us by government, the right to speak and write our ideas, ...?
- This may be a good time to review Selected Legal Principles.
- The next page introduces the concept of torts.