Police Power, Eminent Domain & Taxes
~11 min read · Sort PETE: police power, eminent domain, taxation, escheat — and just compensation.
Four government powers hang over every private title — remembered as PETE: Police power, Eminent domain, Taxation, Escheat. The exam's dividing line is compensation: regulation is free; taking requires just compensation.
Police power vs eminent domain
Police power regulates for health, safety, morals, and general welfare — zoning, building codes, environmental rules — with no compensation, because the owner keeps the property, merely regulated. Eminent domain TAKES: government (or delegated utilities/redevelopers) acquires private property for public use upon payment of just compensation (fair market value); the proceeding is condemnation, and an owner may sue in inverse condemnation when government action effectively takes property without formally condemning (the airport's flight path, the regulation that destroys all economic use — a regulatory taking).
- Regulate = free (police power); take = paid (eminent domain)
- Condemnation is the action; just compensation = FMV
- Inverse condemnation: the owner sues first
- Regulation destroying ALL economic use can be a compensable taking
Taxation and escheat
Taxation: ad valorem property taxes fund local government; unpaid taxes create the super-priority lien and, ultimately, tax sale — with statutory redemption rights letting owners cure. Special assessments charge benefited parcels for local improvements (sidewalks, sewers). Escheat: property of an owner who dies intestate with no locatable heirs passes to the state — the backstop that ensures land always has an owner. Escheat is rare and never punitive; it simply prevents ownerless land.
- Ad valorem taxes; delinquency → super-lien → tax sale → redemption window
- Special assessments: benefited parcels pay for improvements
- Escheat: intestate + heirless = state takes
Public use and its edges
'Public use' reads broadly — roads and schools, but also utilities and (controversially) redevelopment plans with public purpose. Partial takings pay for the part taken plus severance damages to the remainder. The exam's compensation logic: WHICH power acted decides WHETHER payment is owed — the same lost value is uncompensated under zoning and compensated under condemnation.
Worked example
A highway widening condemns the front 30 feet of a motel's parking, leaving the building intact but killing half its parking capacity. The same year, new environmental rules bar any construction on the motel's undeveloped wetland parcel next door. The owner demands payment for both. Who pays what?
The strip: classic eminent domain — just compensation for the 30 feet at fair market value PLUS severance damages for the harm to the remainder (a motel with half its parking is worth less than before minus the strip's value alone). The wetland rules: police-power regulation — ordinarily uncompensated even though value dropped; the exception the owner must prove is a regulatory taking: if the rules deprive the parcel of ALL economically viable use, inverse condemnation can force compensation. Partial value loss: no pay. Total use destruction: pay. The two parcels teach the whole doctrine — the power that acted, not the size of the loss, determines the check.
Common exam pitfalls
Demanding compensation for zoning losses.
Police-power regulation is uncompensated unless it destroys essentially all economic use.
Forgetting severance damages on partial takings.
Compensation = part taken + damage to the remainder.
Stretching escheat to any unclaimed situation.
Escheat needs intestacy AND no findable heirs — a will or an heir defeats it.
PETE: Police regulates free, Eminent domain pays, Taxes lien first, Escheat catches the heirless.
Recap
- Police power: uncompensated regulation for public welfare
- Eminent domain: public use + just compensation via condemnation
- Inverse condemnation and regulatory takings protect owners
- Partial takings add severance damages
- Tax liens hold super-priority; redemption follows tax sale
- Escheat: intestate, heirless property passes to the state
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