Chapter 4 - Nat'l Ownership - Units 8-11 Flashcards
(167 cards)
1
Q
Real Estate Planning: Goals of Land Use Control (5)
A
Over time, public and private control of land use has come to focus on certain core purposes. These are:
Preservation of property values.
Promotion of the highest and best use of property.
Balance between individual property rights and the public good, i.e., its health, safety and welfare.
Control of growth to remain within infrastructure capabilities.
Incorporation of community consensus into regulatory and planning activities.
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Q
A community achieves its land usage goals through a three-phase process:
A
Development of a master plan for the jurisdiction.
Administration of the plan by a municipal, county, or regional planning commission.
Implementation of the plan through public control of zoning, building codes, permits, and other measures.
Municipal, county, and regional authorities develop comprehensive land use plans for a particular community with the input of property owners. A planning commission manages the master plan and enforces it by exercising its power to establish zones, control building permits, and create building codes.
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Q
Real Estate Planning: The Master Plan
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Public land use planning incorporates long-term usage strategies and growth policies in a land use plan, or master plan, also called a comprehensive plan. In many states, the process of land use planning begins when the state legislature enacts laws requiring all counties and municipalities to adopt a land use plan. The land use plan must not only reflect the needs of the local area, but also conform to state and federal environmental laws and the plans of regional and state planning agencies. The state enforces its planning mandates by giving state agencies the power to approve county and local plans.
The primary objectives of a master plan are generally to control and accommodate social and economic growth
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Q
Real Estate Planning: Planning Objectives - Amount of Growth (9)
A
A growth plan considers:
Nature, location and extent of permitted uses.
Availability of sanitation facilities.
Adequacy of drainage, waste collection, and potable water systems.
Adequacy of utilities companies.
Adequacy and patterns of thoroughfares.
Housing availability.
Conservation of natural resources.
Adequacy of recreational facilities.
Ability and willingness of the community to absorb new taxes, bond issues, and assessments.
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Q
Real Estate Planning: Planning Objectives - Growth Patterns (6)
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a master plan also defines what type of growth will occur, and where. Major considerations are:
Type of enterprises and developments to allow:
Residential density and commercial intensity.
Effects of industrial and commercial land uses on residential and public sectors, i.e., where to allow such uses.
Effect of new developments on traffic patterns and thoroughfares.
Effects on the environment and environmental quality (air, water, soil, noise, visual aspects).
Effect on natural resources that support the community.
Code specifications for specific construction projects.
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Q
Real Estate Planning: Planning Objectives - Accommodating Demand (3)
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As the master plan sets forth guidelines for how much growth will be allowed, it must also make plans for accommodating expanding or contracting demand for services and infrastructure. The plan must identify:
Facilities requirements for local government.
New construction requirements for streets, schools, and social services facilities such as libraries, civic centers, etc.
New construction required to provide power, water and sewer services.
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Q
Real Estate Planning: Development and Management - Plan Development (5)
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In response to land use objectives, community attitudes, and conclusions drawn from research, the planning personnel formulate their plan. In the course of planning, they analyze:
Population and demographic trends. Economic trends. Existing land use. Existing support facilities. Traffic patterns.
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Q
Real Estate Planning: Development and Management - Planning Management (3)
A
Public land use management takes place within county and municipal planning departments. These departments are responsible for:
Long-term implementation of the master plan.
Creating rules and restrictions that support plans and policies.
Enforcing and administering land use regulation on an everyday basis.
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Q
Real Estate Planning: Development and Management - The Planning Commission
A
The commission oversees the operations of the department’s professional planning staff and support personnel. In addition, the commission makes recommendations to elected officials concerning land use policy and policy administration.
The planning commission is responsible for:
Approving site plans and subdivision plans.
Approving building permits.
Ruling on zoning issues.
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Q
Public Land Use Control and examples (5)
A
At the local level, county and city governments control land use through the authority known as police power. The most common expressions of police power are county and municipal zoning.
Other examples of public land use control are:
Subdivision regulations. Building codes. Eminent domain. Environmental restrictions. Development requirements.
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Q
Public Land Use Control: Zoning
A
Primary tool by which cities and counties regulate land use and implement their respective master plans. The Constitution grants the states the legal authority to regulate, and the states delegate the authority to counties and municipalities through legislation called enabling acts.
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Q
Public Land Use Control: Zoning Ordinance
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The vehicle for zoning a city or county is the zoning ordinance, a regulation enacted by the local government. The intent of zoning ordinances is to specify land usage for every parcel within the jurisdiction. In some areas, state laws permit zoning ordinances to apply to areas immediately beyond the legal boundaries of the city or county.
Zoning ordinances implement the master plan by regulating density, land use intensity, aesthetics, and highest and best use.
Ordinances typically address:
Nature of land use– office, commercial, residential, etc.
Size and configuration of a building site, including setbacks, sidewalk requirements, parking requirements, and access.
Site development procedures.
Construction and design methods and materials, including height restrictions, building-to-site area ratios, and architectural styles.
Use of space within the building.
Signage.
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Q
Public Land Use Control: Ordinance Validity
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Local planners do not have unlimited authority to do whatever they want. Their zoning ordinances must be clear in import, apply to all parties equally, and promote health, safety, and welfare of the community in a reasonable manner.
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Q
Public Land Use Control: Building Permits
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Local governments enforce zoning ordinances by issuing building permits to those who want to improve, repair, or refurbish a property. To receive a permit, the project must comply with all relevant ordinances and codes. Further zoning enforcement is achieved through periodic inspections.
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Public Land Use Control: Types of Zones (6)
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One of the primary applications of zoning power is the separation of residential properties from commercial and industrial uses. Proper design of land use in this manner preserves the aesthetics and value of neighborhoods and promotes the success of commercial enterprises through intelligently located zones.
Six common types of zone are:
Residential. Commercial. Industrial. Agricultural. Public. Planned unit development (PUD).
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Public Land Use Control: Residential Zone
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Residential zoning restricts land use to private, non-commercial dwellings. Sub-zones in this category further stipulate the types of residences allowed, whether single-family, multi-unit complexes, condominiums, publicly subsidized housing, or other form of housing.
Residential zoning regulates:
Density, by limiting the number and size of dwelling units and lots in an area.
Values and aesthetics, by limiting the type of residences allowed.
Some areas adopt buffer zones to separate residential areas from commercial and industrial zones.
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Public Land Use Control: Commercial Zone
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Commercial zoning regulates the location of office and retail land usage. Some commercial zones allow combinations of office and retail uses on a single site. Sub-zones in this category may limit the type of retail or office activity permitted, for example, a department store versus a strip center.
Commercial zoning regulates:
Intensity of usage, by limiting the area of store or office per site area. Intensity regulation is further achieved by minimum parking requirements, setbacks, and building height restrictions.
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Q
Public Land Use Control: Industrial Zone
A
Industrial zoning regulates:
Intensity of usage.
Type of industrial activity.
Environmental consequences.
A municipality may not allow some industrial zones, such as heavy industrial, at all. The industrial park is a relatively recent concept in industrial zoning.
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Public Land Use Control: Agricultural Zone
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Agricultural zoning restricts land use to farming, ranching, and other agricultural enterprises.
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Public Land Use Control: Public Zone
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Public zoning restricts land use to public services and recreation. Parks, post offices, government buildings, schools, and libraries are examples of uses allowed in a public zone.
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Public Land Use Control: Planned Unit Development (PUD)
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Planned unit development zoning restricts use to development of whole tracts that are designed to use space efficiently and maximize open space. A PUD zone may be for residential, commercial, or industrial uses, or combinations thereof.
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Q
Public Land Use Control: Zoning Administration (Board of Adjustment)
A
The board rules on interpretations of zoning ordinances as they apply to specific land use cases presented by property owners in the jurisdiction. In effect, the zoning board is a court of appeals for owners and developers who desire to use land in a manner that is not entirely consistent with existing ordinances.
A zoning board generally deals with such issues and appeals as:
Nonconforming use.
Variance.
Special exception conditional use permit.
Zoning amendment.
If the board rejects an appeal, the party may appeal the ruling further in a court of law.
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Public Land Use Control: Zoning Administration - Nonconforming Use (Legal and Illegal)
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Legal: A nonconforming use is one that clearly differs from current zoning. Usually nonconforming uses result when a zoning change leaves existing properties in violation of the new ordinance.
A board usually treats this kind of situation by allowing it to continue either:
Indefinitely.
Until the structures are torn down.
Only while the same use continues.
Until the property is sold.
Illegal: one that conflicts with ordinances that were in place before the use commenced.
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Q
Examples or Legal and Illegal Nonconforming Use
A
Legal: a motel is situated in a residential area that no longer allows commercial activity. The zoning board rules that the motel may continue to operate until it is sold, destroyed or used for any other commercial purpose.
Illegal: one that conflicts with ordinances that were in place before the use commenced. For instance, if the motel in the previous example is sold, and the new owner continues to operate the property as a motel, the motel is now an illegal, nonconforming use.
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Public Land Use Control: Zoning Administration - Variance
A zoning variance allows a use that differs from the applicable ordinance for a variety of justifiable reasons, including that:
Compliance will cause unreasonable hardship.
The use will not change the essential character of the area.
The use does not conflict with the general intent of the ordinance.
For example, an owner mistakenly violates a setback requirement by two feet. His house is already constructed, and complying with the full setback now would be extremely expensive, if not impossible. The zoning board grants a variance on the grounds that compliance would cause an unreasonable hardship.
A grant of a zoning variance may be unconditional, or it may require conditions to be fulfilled, such as removing the violation after a certain time.
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Public Land Use Control: Zoning Administration - Special Exception
A special exception grant authorizes a use that is not consistent with the zoning ordinance in a literal sense, yet is clearly beneficial or essential to the public welfare and does not materially impair other uses in the zone.
A possible example is an old house in a residential zone adjacent to a retail zone. The zoning board might grant a special exception to a local group that proposes to renovate the house and convert it to a local museum, which is a retail use, since the community stands to benefit from the museum.
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Public Land Use Control: Zoning Administration - Amendment
A current or potential property owner may petition the zoning board for an outright change in the zoning of a particular property.
For example, a property zoned for agricultural use has been idle for years. A major employer desires to develop the property for a local distribution facility, which would create numerous jobs, and petitions for an amendment. The board changes the zoning from agricultural to light industrial to permit the development. Since a change in zoning can have significant economic and social impact, an appeal for an amendment is a difficult process that often involves public hearings.
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Public Land Use Control: Subdivision Plat Approval and Requirement (9)
The plat, as a minimum, shows that the plan complies with local zoning and building ordinances. The project can commence only after the relevant authority has approved the plat.
Subdivision requirements typically regulate:
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Location, grading, alignment, surfacing, street width, highways.
Sewers and water mains.
Lot and block dimensions.
Building and setback lines.
Public use dedications.
Utility easements.
Ground percolation.
Environmental impact report.
Zoned density.
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Public Land Use Control: Extraterritorial Jurisdiction (ETJ)
In some states, subdivisions of land that are located within a certain distance of an incorporated city or town must be approved by the municipality. In counties that are densely populated, the county must approve subdivisions. This is called extraterritorial jurisdiction, or ETJ. A buyer of property outside city limits must be notified that the city may annex the property into the city at some time in the future. As long as the property remains in the ETJ the municipality has no right to control land use. If the municipality does annex the property, however, the city would have the right to control land use.
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Public Land Use Control: Concurrency
Many states have adopted policies that require developers, especially of subdivisions, to take responsibility for the impact of their projects on the local infrastructure by taking corrective action. Concurrency is a policy that requires the developer to make accommodations concurrently with the development of the project itself, not afterwards.
For example, if a project will create a traffic overload in an area, the developer may have to widen the road while constructing the project.
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Public Land Use Control: FHA Requirements
In addition to local regulation, subdivisions must meet FHA (Federal Housing Authority) requirements to qualify for FHA financing insurance. The FHA sets standards similar to local ordinances to ensure an adequate level of construction quality, aesthetics, and infrastructure services.
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Public Land Use Control: Building Codes
Building codes allow the county and municipality to protect the public against the hazards of unregulated construction. Building codes establish standards for virtually every aspect of a construction project, including offsite improvements such as streets, curbs, gutters, drainage systems, and onsite improvements such as the building itself.
Building codes typically address:
Architectural and engineering standards.
Construction materials standards.
Building support systems such as life safety, electrical, mechanical, and utility systems.
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Certificate of Occupancy
Building inspectors inspect a new development or improvement for code compliance. If the work complies, the municipality or county issues a certificate of occupancy, which officially clears the property for occupation and use.
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Public Land Use Control: Public Acquisition and Ownership
If efforts to regulate privately owned property are inadequate or impractical in a particular situation, or if there is a compelling public need, a county or local government may acquire property by means of direct purchase.
A government body might acquire land because of the public need for:
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Thoroughfares and public rights-of-way.
Recreational facilities.
Schools.
Essential public facilities.
Urban renewal or redevelopment.
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If the private party is unwilling to sell, the government may purchase the property anyway. The power to do this is called eminent domain.
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Public Land Use Control: Eminent Domain
Eminent domain allows a government entity to purchase a fee, leasehold, or easement interest in privately owned real property for the public good and for public use, regardless of the owner's desire to sell or otherwise transfer any interest (involuntary). In exchange for the interest, the government must pay the owner "just compensation."
Public entities that have the power of eminent domain include:
All levels of government.
Public districts (schools, etc.).
Public utilities.
Public service corporations (power companies, etc.).
Public housing and redevelopment agencies.
Other government agencies.
To acquire a property, the public entity must first adopt a formal resolution, often called a "resolution of necessity." Must be adopted at a formal hearing where the owner may voice an opinion.
The property is purchased and the title is transferred in exchange for just compensation. Transfer of title extinguishes all existing leases, liens, and other encumbrances on the property. Tenants affected by the condemnation sale may or may not receive compensation, depending on the terms of their agreement with the landlord.
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Private Land Use Control: Deed Restrictions
A restriction expressed in a conveyance (deed or lease) of a residential, commercial, or industrial property places limits on the use of the property. A quitclaim deed can terminate a private deed restriction. Such restrictions are also referred to as "covenants, conditions, and restrictions," or CCRs. Most covenants have a time limit. At that time, those who own the property may agree to extend or renew existing CCRs.
Typical deed restrictions concern:
Required minimum area of a residence.
Setback.
Prohibition against construction of sheds or secondary buildings.
Prohibition against conducting certain commercial activities.
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Private Land Use Control: Deed Conditions
Restrictions that provide for a reversion of title if they are violated.
May restrict certain uses of a property, much like a deed restriction.
If a condition is violated, ownership reverts to the grantor.
These conditions create a defeasible fee estate, as discussed in an earlier chapter.
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Private Land Use Control: Declaration Restrictions
Preserve the value and quality of the neighborhood, commercial center, or industrial park.
The declaration of a subdivision, Planned Unit Development, condominium, and commercial or industrial park contains private use restrictions. These have the same legal effect as a deed restriction, as the declaration attaches to the rights in the property. A private party cannot, however, extinguish a declaration restriction by agreement or quitclaim deed.
The kinds of restrictions found in declarations are much the same as those found in deeds: construction restraints, aesthetics standards, etc.
The owners of a property have the responsibility of making sure that the other property owners are complying with the restrictions.
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Private Land Use Control: Restrictive Covenants
Promises by those who purchase property in the subdivision to limit the use of their property to comply with the requirements of the restrictive covenants. Therefore, they are negative easements.
Restrictions must be reasonable, and they must benefit all property owners alike.
If the subdivision is in a zoned area, restrictive covenants have priority over the zoning ordinance to the extent that the covenants are more restrictive than the zoning requirements.
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Typical restrictions you might see in a subdivision declaration of restrictions are: (9)
Only single-family homes are allowed.
Homes must have a specified minimum number of square feet of living area.
Only one home is allowed per lot.
Lots may not be subdivided.
Homes must be architecturally similar. All site plans and structure specifications must be approved by a committee before construction.
Buildings must be set back a certain number of feet from the front property line and from the interior property lines. (This is referred to as setback requirements.)
No temporary buildings are permitted.
Either one property owner or several owners can initiate a court action to enforce the covenants.
Covenants are in effect for a certain period of time. Some restrictions are automatically renewed, but can be changed by a vote of the property owners.
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Restrictive covenants may be terminated in any of these ways: (5)
The specified time period of the covenant expires.
The property owners vote to end the restrictions. This may require a unanimous vote of all owners or a smaller vote of some subset of owners, depending on how the restriction was written.
Over time the character of the subdivision changes making it more suitable for some other kind of use.
The property owners choose not to follow the original plan by violating their own restrictions. In this kind of situation, any attempt to later enforce the restrictions might be disallowed by a court.
The owners do not enforce the restrictions in a timely manner.
For example, if the property owners wait until an inappropriate structure is complete before they petition the court for enforcement, the court may choose not to enforce the restriction and terminate it altogether. When a court terminates a covenant in this way, the court is applying the Doctrine of Laches. This doctrine states that if a property owner is lax in protecting his or her rights, the property owner may lose those rights.
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Environmental Controls: Air Quality
With today's construction methods creating airtight, energy-efficient structures, attention to sources of indoor air pollution is more important than ever. Off-gassing from synthetic materials and lack of ventilation can lead to such consequences as Sick Building Syndrome (SBS) and Building-Related Illness (BRI), as well as other health problems.
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Environmental Controls: Air Quality - Asbestos
Powdery mineral once commonly used as a fireproof insulating material around pipes, in floor tiles and linoleum, in siding and roofing, in wallboard, joint compound, and many other applications.
When airborne, it is a health hazard. Its use today is highly restricted, and removal can be expensive and dangerous.
Inspection by a certified asbestos inspector is the best way to determine whether a building needs treatment.
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Environmental Controls: Air Quality - Carbon Monoxide
Colorless, odorless, poisonous gas that may result from faulty heating equipment.
Home and commercial detection devices are available.
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Environmental Controls: Air Quality - Formaldehyde and Lead
F: Chemical used in building materials and in other items such as fabrics and carpeting. As it ages, formaldehyde gives off a colorless, pungent gas.
L: Heavy metal once widely used in paints and plumbing materials. Occurs in airborne paint particles, paint chips, and soil and groundwater polluted by various external sources of emission.
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Environmental Controls: Air Quality - Mold
Fungus that grows in the presence of moisture and oxygen on virtually any kind of organic surface. It often destroys the material it grows on and emits toxic irritants into the air. Tightly sealed structures with inadequate ventilation are most susceptible. Roof leaks, improper venting of appliances, runoff from gutters and downspouts, and flood damage are common contributors.
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Environmental Controls: Air Quality - Radon
Colorless, odorless, radioactive gas that occurs naturally in the soil throughout the United States. It enters buildings through foundation and floor cracks, wall seams, sump pits, and windows, among other ways. At accumulations above certain levels, it is suspected of contributing to cancer. Excessive radon can be removed by special ventilation systems.
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Environmental Controls: Soil and Water Quality
Soil, groundwater, and drinking water supplies are vulnerable to pollution from leaking landfills; improper waste disposal; agricultural runoff; industrial dumping in waterways; highway and rail spills; industrial emissions; internal combustion emissions; and underground tanks leaking fuels and chemicals, to mention but a few sources.
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Common Soil and Water Quality problems (6)
Dioxins - a family of compounds produced as a byproduct of manufacturing and incinerating materials that contain chlorine.
Lead and mercury - common metallic elements used or produced in manufacturing processes.
MTBE, Methyl Tertiary Butyl Ether - a gasoline additive.
PCB, Polychlorinated Biphenyl - a substance formerly widely used as an electrical insulation.
Underground Storage Tanks (USTs) - regulated since 1984.
Wetlands - considered part of the natural water filtering system, as well as special habitats, subject to restrictions on development and use.
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Other regulated and controlled environmental conditions include: (3)
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Electromagnetic Fields (EMTs) created by power lines .
Noise created by airports, air, rail and highway traffic.
Earthquake and flood hazards that affect hazard insurance, lending practices, and construction requirements for buildings in designated flood and earthquake zones. Some water authorities control building construction in flood zones to keep from impeding flow of flood water.
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Environmental Controls: Responsibilities and Liabilities
Licensees are expected to be aware of environmental issues and to know where to look for professional help.
Be aware of potential hazards.
Disclose known material facts.
Distribute the HUD booklet.
Know where to seek professional help.
They are not expected to have expert knowledge of environmental law nor of physical conditions in a property. Rather, they must treat potential environmental hazards in the same way that they treat other material facts about a property: disclosure.
Sellers or lessors of almost all residential properties built before 1978 to disclose known lead-based paint hazards and provide any relevant records available. The seller is not required to test for lead but must allow the buyer a ten-day period for lead inspection.
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Real Estate Taxation
Refers to the taxation of real estate as property. Real estate property taxes are imposed by "taxing entities" or "taxing districts" at county and local levels of government (State and Local/County).
There are no federal taxes on real property. The Constitution of the United States specifically prohibits such taxes. The federal government does, however, tax income derived from real property and gains realized on the sale of real property. The federal government can impose a tax lien against property for failure to pay any tax due the Internal Revenue Service.
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Real Estate Taxation: State Gov't
States may legally levy taxes on real property, but most delegate this power to counties, cities, townships and local taxing districts. Some states place limits on how local governments may levy such taxes. States may impose a tax lien against property for failure to pay any real property taxes which the state has levied or delegated to local taxing bodies.
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Real Estate Taxation: Local/County Gov't
Counties, cities and municipalities, townships and special tax districts levy taxes on real property to raise funds for providing local services. It is common for the county to collect all real property taxes and distribute it among the other taxing bodies.
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Purpose of Taxation
To raise funds to pay for municipal services. The collection of taxes provides important revenue for the local government and for area schools. Property taxes are based on the assessed value of the property. These values are also used to calculate the amount of state aid for education.
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Local/County Assessment Units
Assessing units such as counties, cities and municipalities, townships and special assessment districts levy taxes on real property. It is common for the county to collect all real property taxes and distribute it among the other taxing bodies.
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Why Tax Land? (3)
Property tax revenue is predictable. The fair market value of property is generally very stable.
The taxes are hard to avoid. Because the taxes are tied directly to the property, people tend to pay the taxes rather than suffer the potential consequences of non-payment. More than 95 percent of the levied taxes on real property are paid, especially since most lenders require that the property taxes be paid into an escrow account monthly.
Land is traditionally related to productivity and wealth; government takes its share.
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Tax Districts
County and local governments establish tax districts to collect funds for providing specific services. The boundaries of such districts typically do not coincide with municipal boundaries. The major tax district in most areas is the school district.
Other important tax districts are those for fire protection, community colleges, and parks.
Local government authority may establish a special tax district to pay for the cost of a specific improvement or service that benefits that area (ex. funding extension for municipal water services in a new area). Special tax districts cease to exist once the costs of the specific project have been paid for, unlike permanent tax districts.
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A property tax bill might include tax levies from such districts as the following: (14)
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bridge and highway
nursing home
storm water management
township
fire district
school district
retirement
health services
historical museum
sanatorium
forest preserve/land management
public library district
park district
community college district
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Ad Valorem Taxation Mechanics: Assessment
As stated earlier, general property taxes are levied on an ad valorem basis, meaning that they are based on the assessed value of the property.
Assessed value is determined according to state law, usually by a county or township assessor or appraiser. The actual tax, though based on assessed value, may be derived as a legislated percentage of the assessed value. The property's assessment itself may be a percentage of its fair market value, which is the amount the property would sell for in the current market.
Land and improvements may be assessed separately. Ad valorem taxes are paid annually.
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Ad Valorem Taxation Mechanics: Valuation
Commercial property may be valued on its potential to produce rental income for its owners.
Agricultural property valuation is not based on market value, but rather on the productivity of the land, provided that the owner makes a certain percentage of income from farming or ranching.
Open space valuation is determined much the same way as agricultural property, but the owner does not have to prove that a percentage of income is acquired through farming. However, if the use of the land changes from agricultural to market value, there may be a liability for back taxes.
The assessor can use whatever approach provides the best estimate of a property's market value according to its current use.
The role of the assessor in the taxing process is limited to making the valuation and notifying the owner of the assessed value; other tax officials determine the tax rate and the tax levy.
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Taxation Mechanics: Level of Assessment
Once the assessor estimates the value of a property, the value may be adjusted by multiplying by a uniform percentage for the municipality. The percentage of full or market value at which properties are assessed is called the level of assessment or LOA. For example, an LOA of 25 percent means that assessments are one-fourth of the market value, so a home with a market value of $100,000 would be assessed at $25,000.
After a property's total assessment is determined, its taxable assessed value is computed. The taxable assessed value is the total assessment minus any applicable property tax exemptions. Exemptions are typically either whole or partial. We'll talk more about specific exemptions later in this chapter.
In theory, ad valorem taxation should lead to the result that two owners of real property of equal value pay the same amount in property taxes.
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Taxation Mechanics: Equalization
Factors that level out the unevenness of valuations.
For instance, if assessed values of properties in one county are consistently ten percent below the average for other counties, an equalization board may multiply each assessed value in that county by a factor of 110% to raise them to the average level for the state.
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Taxation Mechanics: Reassessment
Properties are reassessed for tax purposes on a regular schedule that is established by statute. But reassessments also occur under other circumstances.
If a property in a certain neighborhood increases in value but is not reassessed, over time it will become under-assessed.
Reassessments can be done "off schedule" when a property owner makes improvements to the property. Assessors are not allowed to do what are called "spot" reassessments on an individual parcel of property unless it is obvious or it has been reported that a material change was made to the property.
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Examples of Property Reassessment
Mr. Temple and Mr. Green both purchased homes in Smallville five years ago. The purchase price for both homes was $150,000, so the tax bill for both properties was the same. Smallville has not updated its assessments in the past five years. Because of its location, Mr. Temple's home has increased in value to $200,000. Mr. Green's home has also appreciated, but not to the same degree. Mr. Green's home is worth $160,000 now. Even though their property values have increased, both homeowners have been paying the same amount in taxes since they purchased their homes.
If the property in Smallville is reassessed, both Mr. Temple and Mr. Green will see an increase in their tax bill appropriate to the increased value of their homes. This will increase the town's revenue. Other homeowners in Smallville may see no change in their property values, while others may see a decrease in the value and a decrease in their tax bill.
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Taxation Mechanics: Old Vs. New Construction
Some types of construction projects are more likely than others to prompt a reassessment. These types of projects might include:
Finishing a basement into a family room or other living quarters.
Adding a garage.
Installing an in-the-ground swimming pool.
If the assessor sees that these renovations are not in the current tax record, he or she will reassess the property to include those changes.
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Taxation Mechanics: Undeclared Improvements
Most property improvements require a building permit of some kind for recording purposes. Most property improvements require a building permit of some kind. Building permits are periodically reviewed and the property records are updated to reflect any changes.
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Taxation Mechanics: Appeals
Property owners may object to the assessed value of their property, but not to the tax rate. An owner usually has a certain period to protest after receiving notice of the assessed value. According to local law, a property owner must present evidence that the assessor made an error to a review board or appeal board. Typical evidence would include market data on comparable properties that sold recently, or evidence that neighboring properties had less appreciation or even declined in assessed value in comparison with the protestor's property.
An owner who is dissatisfied with the actions of the appeals or review board can take the protest to court.
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Taxation Mechanics: Real Property Tax Exemptions
Real property tax exemptions are granted on the basis of many different criteria, including the following:
The use to which the property is put.
The owner's ability to pay taxes.
The desire of the state and local governments to encourage certain economic or social activities.
Certain exemptions provide full relief from taxation, that is, the property is wholly exempt. Other exemptions reduce the taxes which would otherwise be payable by varying degrees, making the property partially exempt.
Properties owned by governments and religious organizations are wholly exempt. Other exemptions exist for agricultural and forest property. Exemptions may also be granted to not-for-profit educational and charitable groups.
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Taxation Mechanics: Real Property Tax Exemptions - Homestead Exemption
A homestead is a parcel of real property that is owned and occupied as a family home. Some states exempt a portion of the value of the homestead from judgments to protect families against eviction by creditors. States and counties may exempt a portion of the assessed value of the principal residence from property taxation.
A property owner generally qualifies for a homestead exemption by meeting two criteria:
Is head of a family.
Resides on the property for a required length of time.
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Definitions of Homestead Classes (6)
One-, two-, or three-family residential dwellings.
Owner-occupied and separately-assessed mobile homes.
Residential condominiums.
Parts of parcels primarily used for farming purposes, which accommodate farm dwellings and improvements exclusively used for residential purposes.
Vacant land parcels located in a zone that allows only a residential use for one-, two- or three-family residential real property.
Land used in agricultural production and all farm buildings and structures located on such land.
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Non-homestead Class
Defined as all real property that is not included in the homestead class.
Includes commercial, industrial and utility properties as well as some vacant land.
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Taxation Mechanics: Other Exemptions
Government-owned properties-- real properties owned by federal, state, and local governments are immune from real property taxation (also true in all other states)
Properties owned by non-profit organizations-- real properties owned by churches and non-profit organizations are exempt from real property taxation (also true in all other states)
Miscellaneous exemptions may be granted to classes of property owner, such as: senior citizens, widows, and disabled individuals.
States and municipalities may also offer property tax reductions or exemptions to certain industries to encourage economic growth.
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What appraisal methods do tax assessors use to determine the assessed value of a property?
Assessors use any of the standard appraisal methods—Sales Comparison, Cost, Income—to assess properties, depending on the type of property. Agricultural land valuation is based on land productivity. The assessor uses whatever approach provides the best estimate of market value, which may then be modified according to formulas to arrive at an assessed value.
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Tax Derivation: Tax Base Totaling
The tax base of an area is the total of the appraised or assessed values of all real property within the area's boundaries, excluding partially or totally exempt properties:
tax base = assessed values - exemptions
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Tax Derivation: Tax District Budgeting
The derivation of a tax rate begins with the taxing body determining its funding requirements to provide services for the year. This requirement is formalized in the annual budget. Then the county or district looks at its sources of revenue, such as sales taxes, business taxes, income taxes, state and federal grants, fees, and so forth.
The part of the budgeted expenditures that cannot be funded from other income sources must come from real property taxes. This budgetary shortfall becomes the ad valorem tax levy. The tax levy is derived every year, since budget requirements and revenue tallies are performed on an annual cycle.
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Tax Derivation: Tax Rate
tax requirement/tax base = tax rate (milleage rate)
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Tax Rate calculation example
A taxing body needs $500,000 from property taxes, and the tax base for the district is $15,000,000, the tax rate for this body is: $500,000/$15,000,000 = .03 OR 30 mills -- $3 per $100 -- $30 per $1,000 -- 3%
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Tax Derivation: Tax Rate Limitations
Some states, counties or other taxing districts place limitations or caps on the absolute millage rate or the annual increase in millage for property taxes.
In such situations, taxing bodies are forced to limit their budget requirements, unless there has been a sufficient increase in tax base to produce the required funds without raising the millage rate.
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Taxation Mechanics: Tax Payment Deadline
Set by law and differ from region to region.
Taxes are paid in arrears at the end of the tax period. Different taxing bodies may have different fiscal years, and as a result may issue tax bills at different times of the year. It is more common for a county to issue a bill that consolidates the bills of all the lesser taxing bodies.
may be payable annually, semi-annually, quarterly, or on some other schedule as prescribed by law.
In many cases where the owner has a mortgage and a required escrow account, the escrow officer will pay the tax bill. The owner will only receive notice of the assessed value and the tax statement.
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Taxation Mechanics: Special Assessments
A tax levied against specific properties that will benefit from a public improvement.
The assessment creates a specific lien against the property until it is paid.
Common examples are assessments for sidewalks, water service and sewers.
Special assessments are based on the cost of the improvement and apportioned on a pro rata basis among benefiting properties according to the value that each parcel will receive from the improvement.
If a taxing entity initiates an assessment, the assessment creates an involuntary tax lien. If property owners initiate the assessment by requesting the local government to provide the improvement, the assessment creates a voluntary tax lien.
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Special Assessment example
For example, a dredging project is approved to deepen the canals for a canal-front subdivision. The project cost is $50,000. Although there are 100 properties in the subdivision, only the 50 that are directly on the canal stand to benefit. Therefore, assuming each canal-front lot receives equal benefit, the 50 properties are each assessed $1,000 as a special assessment tax. Note that once the work is completed and paid, the assessment is discontinued.
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Tax Lien Enforcement
A tax lien is a lien against real property for the failure to pay property taxes. A tax lien, like other lien types, generates an encumbrance against the property, which is removed when the taxes are paid. Tax liens take priority over other liens, meaning that when title to a property is transferred, the tax lien should be paid first.
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In Rem Proceeding
In some states, a local official can bring a legal action, called an in rem legal proceeding, to collect the taxes. An in rem proceeding is one that is directed against a thing, rather than against a person. Typically this involves a forced sale of the property.
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Sale of Tax Certificates
Some states sell tax certificates. The buyer of a tax certificate agrees to pay the taxes due. After a period of time specified by law, the holder of the tax certificate on a property may then apply for a tax deed.
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Tax Deeds
A tax deed is a legal instrument for conveying title when a property is sold for non-payment of taxes. The application for a tax deed causes the taxing agency to institute a tax sale or tax foreclosure.
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Tax Sale
A tax sale is frequently some type of auction usually conducted by the sheriff. If the tax has not already been paid through the tax certificate process, the buyer of the property must pay the taxes due.
Usually a legally-prescribed redemption period during which the defaulted taxpayer has the right to buy back the property and reclaim title.
If the taxpayer can redeem the property by paying the delinquent taxes and any other charges before the tax sale occurs, this right is known as an equitable right of redemption.
If the taxpayer redeems the property after the tax sale, this right is known as a statutory right of redemption. n this case, the taxpayer must pay the amount paid by the winning bidder at the tax sale, plus any charges, additional taxes, or interest that may have accumulated.
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Contracts (sale/lease/option agreements/mortgage/listing/representation)
The legal agreements that underlie the transfer and financing of real estate, as well as the real estate brokerage business.
Sale and lease contracts and option agreements are used to transfer real estate interests from one party to another.
Mortgage contracts and promissory agreements are part of financing real estate.
Listing and representation contracts establish client relationships and provide for compensation.
A contract is not a legal form or a prescribed set of words in a document, but rather the intangible agreement that was made in "the meeting of the minds" of the parties to the contract.
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In terms of validity and enforceability, a court may construe the legal status of a contract in one of four ways:
Valid.
Valid but unenforceable.
Void.
Voidable.
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Valid Contract
A valid contract is one which meets the legal requirements for validity.
A valid contract that is in writing is enforceable within a statutory time period. A valid contract that is made orally is also generally enforceable within a statutory period.
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Valid But Unenforceable Contracts
State laws declare that some contracts are enforceable only if they are in writing. These laws apply in particular to the transfer of interests in real estate. Thus, while an oral contract may meet the tests for validity, if it falls under the laws requiring a written contract, the parties will not have legal recourse to enforce performance. An oral long-term lease and an oral real estate sales contract are examples of contracts that may be valid but not enforceable.
Note that such contracts, if valid, remain so even though not enforceable. This means that if the parties fully execute and perform the contract, the outcome may not be altered.
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Void Contracts
A void contract is an agreement that does not meet the tests for validity, and therefore is no contract at all. If a contract is void, neither party can enforce it.
For example, a contract that does not include consideration is void. Likewise, a contract to extort money from a business is void. Void contracts and instruments are also described as "null and void."
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Voidable
A voidable contract is one which initially appears to be valid, but is subject to rescission by a party to the contract who is deemed to have acted under some kind of disability. Only the party who claims the disability may rescind the legal effect of the contract.
For example, a party who was the victim of duress, coercion, or fraud in creation of a contract, and can prove it, may disaffirm the contract. However, the disaffirmation must occur within a legal time frame for the act of rescission to be valid. Similarly, if the party who has cause to disaffirm the contract elects instead to perform it, the contract is no longer voidable but valid.
A voidable contract differs from a void contract in that the latter does not require an act of disaffirmation to render it unenforceable.
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A contract is valid only if it meets all of the following criteria:
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Competent parties.
Mutual consent.
Valuable consideration.
Legal purpose.
Voluntary act of good faith.
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Competent Parties
The parties to a contract must have the capacity to contract and there must be at least two such parties.
Capacity to contract is determined by three factors:
Legal age.
Mental competency.
Legitimate authority.
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Mutual Consent
AKA offer and acceptance and meeting of the minds, requires that a contract involve a clear and definite offer and an intentional, unqualified acceptance of the offer.
In effect, the parties must agree to the terms without equivocation.
A court may nullify a contract where the acceptance of terms by either party was partial, accidental, or vague.
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Valuable Consideration
A contract must contain a two-way exchange of valuable consideration as compensation for performance by the other party. The exchange of considerations must be two-way. The contract is not valid or enforceable if just one party provides consideration.
Valuable consideration can be something of tangible value, such as money or something a party promises to do or not do. For example, a homebuilder may promise to build a house for a party as consideration for receiving money from the homebuyer.
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Legal Purpose
The content, promise, or intent of a contract must be lawful.
A contract that proposes an illegal act is void.
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Voluntary, Good Faith Act
The parties must create the contract in good faith as a free and voluntary act. A contract is thus voidable if one party acted under duress, coercion, fraud, or misrepresentation.
For example, if a property seller induces a buyer to purchase a house based on assurances that the roof is new, the buyer may rescind the agreement if the roof turns out to be twenty years old and leaky.
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Validity of A Conveyance Contract
A contract that conveys an interest in real estate must:
Be in writing.
Contain a legal description of the property.
Be signed by one or more of the parties.
A lease contract that has a term of one year or less is an exception. Such leases do not have to be in writing to be enforceable.
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Statute of Limitations
Limits the enforcement of voidable contracts.
The statute of limitations restricts the time period for which an injured party in a contract has the right to rescind or disaffirm the contract. A party to a voidable contract must act within the statutory period.
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Statute of Frauds
Requires that certain contracts must be in writing to be enforceable.
Real estate contracts that convey an interest in real property fall in this category, with the exception that a lease of one year's duration or less may be oral.
Concerns the enforceability of a contract, not its validity. Once the parties to a valid oral contract have executed and performed it, even if the contract was unenforceable, a party cannot use the Statute of Frauds to rescind the contract.
For example, a broker and a seller have an oral agreement. Following the terms of the agreement, the broker finds a buyer, and the seller pays the commission. They have now executed the contract, and the seller cannot later force the broker to return the commission based on the statute of frauds.
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Uniform Electronic Transactions Act
Makes it legal in many states to use electronic signatures in electronic transactions.
These are enforceable documents in complying states.
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Contract Creation: Offer and Acceptance
The mutual consent required for a valid contract is reached through the process of offer and acceptance: The offeror proposes contract terms in an offer to the offeree. If the offeree accepts all terms without amendment, the offer becomes a contract. The exact point at which the offer becomes a contract is when the offeree gives the offeror notice of the acceptance.
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Offer
Expresses the offeror's intention to enter into a contract with an offeree to perform the terms of the agreement in exchange for the offeree's performance. In a real estate sale or lease contract, the offer must clearly contain all intended terms of the contract in writing and be communicated to the offeree.
If an offer contains an expiration date and the phrase "time is of the essence," the offer expires at exactly the time specified. In the absence of a stated time period, the offeree has a "reasonable" time to accept an offer.
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Acceptance
An offer gives the offeree the power of accepting. For an acceptance to be valid, the offeree must manifestly and unequivocally accept all terms of the offer without change, and so indicate by signing the offer, preferably with a date of signing. The acceptance must then be communicated to the offeror which is demonstrated by the delivery of the signed contract to all parties in the transaction. If the communication, delivery of acceptance is by mail, the offer is considered to be communicated as soon as it is placed in the mail.
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Counter-offer
By changing any of the terms of an offer, the offeree creates a counteroffer, and the original offer is void. At this point, the offeree becomes the offeror, and the new offeree gains the right of acceptance. If accepted, the counteroffer becomes a valid contract provided all other requirements are met.
For example, a seller changes the expiration date of a buyer's offer by one day, signs the offer and returns it to the buyer. The single amendment extinguishes the buyer's offer, and the buyer is no longer bound by any agreement. The seller's amended offer is a counteroffer which now gives the buyer the right of acceptance. If the buyer accepts the counteroffer, the counteroffer becomes a binding contract.
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Revocation of an Offer
An offer may be revoked, or withdrawn, at any time before the offeree has communicated acceptance. The revocation extinguishes the offer and the offeree's right to accept it.
For example, a buyer has offered to purchase a house for the listed price. Three hours later, a family death radically changes the buyer's plans. She immediately calls the seller and revokes the offer, stating she is no longer interested in the house. Since the seller had not communicated acceptance of the offer to the buyer, the offer is legally cancelled.
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Termination of Offer (5)
Any of the following actions or circumstances can terminate an offer:
Acceptance: the offeree accepts the offer, converting it to a contract.
Rejection: the offeree rejects the offer.
Revocation: the offeror withdraws the offer before acceptance.
Lapse of time: the offer expires.
Counteroffer: the offeree changes the offer
death or insanity of either party.
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Assignment of a Contract
A real estate contract that is not a personal contract for services can be assigned to another party unless the terms of the agreement specifically prohibit assignment.
Listing agreements, for example, are not assignable, since they are personal service agreements between agent and principal. Sales contracts, however, are assignable, because they involve the purchase of real property rather than a personal service.
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Contract Preparation
State laws define the extent to which real estate brokers and agents may legally prepare real estate contracts. Such laws, referred to as "broker-lawyer accords," also define what types of contracts brokers and agents may prepare. In some states, brokers and agents may not draft contracts, but they may use standard promulgated forms and complete the blanks in the form.
As a rule, a broker or agent who completes real estate contracts is engaging in the unauthorized practice of law unless the broker is a party to the agreement, such as in a listing agreement or sales contract. Brokers and agents may not complete leases, mortgages, contracts for deed, or promissory notes to which they are not a party.
Agents must be fully aware of what they are legally allowed to do and not do in preparing and interpreting contracts for clients. In addition to practicing law without a license, agents expose themselves to lawsuits from clients who relied on a contract as being legally acceptable.
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Oral Vs. Written Contracts
A contract may be in writing, or it may be an oral, or parol, contract. Certain oral contracts are valid and enforceable; others are not enforceable, even if valid. For example, most states require listing agreements, sales contracts, and leases exceeding one year to be in writing to be enforceable.
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Express Vs. Implied Contracts
Express: one in which all the terms and covenants of the agreement have been manifestly stated and agreed to by all parties, whether verbally or in writing.
Implied: an unstated or unintentional agreement that may be deemed to exist when the actions of any of the parties suggest the existence of an agreement.
A common example of an implied contract is an implied agency agreement. In implied agency, an agent who does not have a contract with a buyer performs acts on the buyer's behalf, such as negotiating a price that is less than the listing price. In so doing, the agent has possibly created an implied contract with the buyer, albeit unintended. If the buyer compensates the agent for the negotiating efforts, the existence of an implied agency agreement becomes even less disputable.
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Bilateral Vs. Unilateral Contracts
Bilateral: one in which both parties promise to perform their respective parts of an agreement in exchange for performance by the other party.
An example of a bilateral contract is an earnest money contract: The buyer promises to pay for the property and the seller promises to deliver title to the property.
Unilateral: only one party promises to do something, provided the other party does something. The latter party is not obligated to perform any act, but the promising party must fulfill the promise if the other party chooses to perform.
An option is an example of a unilateral contract: in an option-to-buy, the party offering the option (optionor) promises to sell a property if the optionee decides to exercise the option. While the potential buyer does not have to buy, the owner must sell if the option is exercised.
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Executed Vs. Executory Contracts
Executed: one that has been fully performed and fulfilled - neither party bears any further obligation. A completed and expired lease contract is an executed contract - the landlord may re-possess the premises, and the tenant has no further obligation to pay rent.
Executory: one in which performance is yet to be completed. A sales contract prior to closing is executory, while the parties have agreed to buy and sell, the buyer has yet to pay the seller and the seller has yet to deed the property to the buyer.
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Unconscionable Contracts
One that unduly favors the party with superior bargaining power. It is one that a mentally competent person or honest person would normally reject. Because of the inequality of bargaining power, the element of voluntary participation without duress may be deemed to be absent.
Most contracts of this type occur in consumer transactions and limit the rights of the buyer to seek court relief against the seller or disclaim any warranty that the purchaser may rely upon. A court may look at the relative circumstances of the parties at the time of contracting to determine whether it would be an affront to the judicial system to enforce such a contract.
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Adhesion Contracts
one dictated by the party who has the greater bargaining advantage. It gives the weaker party only the options of accepting or rejecting the contract. Such contracts are not necessarily unconscionable, as they may not unfairly exploit the assenting party. However, courts sometimes refuse to enforce contracts of adhesion on the grounds that there was no true meeting of the minds or no true offer and acceptance because the purchaser had no choice but to accept.
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Aleatory Contracts
One whose effects are triggered by the occurrence of a chance event ("aleatory" means "dependent on chance"). Insurance policies are aleatory contracts in that the insured only receives the proceeds of the policy if a specified event, such as an accident, fire, or death, occurs.
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Termination of a contract occur for: (4)
Performance.
Infeasibility.
Mutual Agreement.
Cooling-Period Rescission.
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Contract Termination: Performance
A contract terminates when fully performed by the parties. It may also terminate for:
Partial performance, if the parties agree.
Sufficient performance, if a court determines a party has sufficiently performed the contract, even though not to the full extent of every provision.
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Contract Termination: Infeasibility
An otherwise valid contract can be canceled if it is not possible to perform. Certain personal services contracts, for example, depend on the unique capabilities of one person, which cannot be substituted by someone else. If such a person dies or is sufficiently disabled, the contract is cancelable.
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Contract Termination: Mutual Agreement
Parties to a contract can agree to terminate, or renounce, the contract. If the parties wish to create a new contract to replace the cancelled contract, they must comply with the validity requirements for the new contract. Such substitution is called novation.
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Contract Termination: Cooling-Period Rescission
Rescission is the act of nullifying a contract. In many states, parties to certain contracts are allowed a statutory amount of time after entering into a contract, or "cooling period," to rescind the contract without cause. No reason need be stated for the cancellation, and the canceling party incurs no liability for performance.
For example, consider the unsuspecting buyer of a lot in a new resort development. Such buyers are often the targets of hard-sell tactics, which lead to a completed sales contract and a deposit. The statutory cooling period gives the buyer an opportunity to reconsider the investment in the absence of the persistent salesperson.
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Contract Termination: Revocation
Revocation is cancellation of the contract by one party without the consent of the other. For example, a seller may revoke a listing to take the property off the market. While all parties have the power to revoke, they may not have a defensible right. In the absence of justifiable grounds, a revocation may not relieve the revoking party of contract obligations.
For example, a seller who revokes a listing without grounds may be required to pay a commission if the broker found a buyer, or reimburse the broker's marketing expenses if no buyer was found.
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Contract Termination: Abandonment
Abandonment occurs when parties fail to perform contract obligations. This situation may allow the parties to cancel the contract.
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Contract Termination: Lapse of Time
If a contract contains an expiration provision and date, the contract automatically expires on the deadline.
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Contract Termination: Invalidity of Contract
If a contract is void, it terminates without the need for disaffirmation. A voidable contract can be cancelled by operation of law or by rescission.
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Contract Termination: Operation of Law
The rights and liabilities of parties to a contract may be changed by the application of law. The Statute of Limitations restricts the time period for which an injured party in a contract has the right to bring a lawsuit against the other party. When a person files for bankruptcy, the person's obligations under existing contracts are terminated as of the filing date.
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Contract Termination: Breach of Contract
Failure to perform according to the terms of the agreement. Also called default, a breach of contract gives the damaged party the right to take legal action, subject to any time limits created by the state's statute of limitations or other legislation.
The damaged party may elect the following legal remedies:
Rescission.
Forfeiture.
Suit for damages.
Suit for specific performance.
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Contract Termination: Breach of Contract - Rescission
A damaged party may rescind the contract. This cancels the contract and returns the parties to their pre-contract condition, including the refunding of any monies already transferred.
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Contract Termination: Breach of Contract - Forfeiture
Forfeiture requires the breaching party to give up something, according to the terms of the contract. For example, a buyer who defaults on a sales contract may have to forfeit the earnest money deposit.
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Contract Termination: Breach of Contract - Suit for Damages
A damaged party may sue for money damages in civil court. The suit must be initiated within the time period allowed by the statute of limitations. When a contract states the total amount due to a damaged party in the event of a breach, the compensation is known as liquidated damages. If the contract does not specify the amount, the damaged party may sue in court for unliquidated damages.
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Contract Termination: Breach of Contract - Suit For Specific Performance
A suit for specific performance is an attempt to force the defaulting party to comply with the terms of the contract. Specific performance suits occur when it is difficult to identify damages because of the unique circumstances of the real property in question. The most common instance is a defaulted sale or lease contract where the buyer or seller wants the court to compel the defaulting party to go through with the transaction, even when the defaulter would prefer to pay a damage award.
Sometimes a contract does not accurately reflect the intentions of the parties because of some mechanical or clerical error in the document. When this happens, a legal action called a reformation is necessary to correct or modify the contract.
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Construction Federal Standards, Laws, and Regulations (4)
The Minimum Property Standards (MPS).
Interstate Land Sale Full Disclosure Act.
National Electric Code.
Americans with Disabilities Act.
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The Minimum Property Standards (MPS)
a set of HUD regulations, establish certain minimum standards for buildings constructed under HUD housing programs. This includes new single family homes, multi-family housing and health care type facilities.
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Interstate Land Sale Full Disclosure Act
This program protects consumers from fraud and abuse in the sale or lease of land. In 1968 Congress enacted the Interstate Land Sales Full Disclosure Act, which is patterned after the Securities Law of 1933 and requires land developers to register subdivisions of 100 or more non-exempt lots with HUD and to provide each purchaser with a disclosure document called a Property Report. The Property Report contains relevant information about the subdivision and must be delivered to each purchaser before the signing of the contract or agreement.
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National Electric Code
The National Electrical Code (NEC) is a United States standard for the safe installation of electrical wiring and equipment. It offers minimal guidelines and standards. It is part of the National Fire Codes series published by the National Fire Protection Association (NFPA). While the NEC is not itself a U.S. law, NEC use is commonly mandated by state or local law.
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Americans with Disabilities Act
ADA mandates that persons with disabilities have equal access to jobs, public accommodations, government services, public transportation, and telecommunications. It prohibits discrimination in the "full and equal enjoyment of goods and services" provided by public places, including hotels, shopping centers, and offices, and it applies to the lease and operation of commercial facilities.
If a contractor is planning to build a new facility or modify an existing one, he or she needs to consult the ADA Standards for the specific requirements. Renovations or modifications are considered to be alterations when they affect the usability of the space; for example, installing a new display counter, replacing fixtures or flooring, or replacing an entry door. However, simple maintenance, such as repainting a wall, is not considered an alteration by the ADA.
ADA also requires new multi-family housing that has at least four units to be easily accessible for the disabled and elderly.
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Country and Local Standards, Laws, and Regulations
Cities, counties, and local governments have the power to impose their own land use regulations and building codes. These laws may not be in opposition to any federal or state laws; however, they can be more restrictive.
Local laws tend to cover those issues that are specific to the area and are enforced by local agencies, such as planning boards and local building code departments. Any legal matters that arise are handled by the local courts.
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Environmental Regulation: National Environmental Policy Act of 1969
This act requires that an environmental impact statement be filed with the appropriate state or local agency before implementing any new construction or development. This procedure helps to ensure that the proposed project will not have a negative impact on the environment.
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Wells Guidelines (3)
Will allow adequate access to the well for inspection, maintenance, repair, renovation, treatment, and testing.
Is not subject to seasonal flooding or surface water contamination, or it should be constructed in such a way that seasonal floodwater cannot enter the well.
Is up-grade from any potential or known source of contamination unless property boundaries, site topography, the location of structures and accessibility require a different location; the minimum horizontal separation distances from potential sources of contamination are published in a table available from the Department of Health.
The ground surface immediately surrounding the well casing should be graded in such a way as to divert surface water away from the well. Concrete should not be used for grading purposes.
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Sanitary Waste
In spite of the trend toward public sewerage systems, individual household sewage treatment systems are still the only method of sewage treatment available in many areas. Properly-designed, constructed and maintained sewage treatment systems minimize the possibility of disease transmission and the potential for contamination of ground and surface waters. Soil percolation must be adequate for absorption, and the land area must be sufficient for the necessary leach field.
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Septic System
An onsite system designed to treat and dispose of domestic sewage. It is used when a sewer line is not available to carry wastes to a sewage treatment plant.
The individual parts of the system are the septic tank, a distribution box, and a leach field. Bacterial action takes place in the septic tank where the end products are mainly water, gases, and undigested material, called sludge that sinks to the bottom of the tank and scum that floats to the top of the tank. The septic tank contains baffles that prevent any scum that floats to the surface and sludge that settles to the bottom from passing out of the tank. The gases that are generated then vent to the atmosphere via the plumbing vent system.
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What are some of the typical requirements for wells and septic systems?
Requirements for wells typically concern placement—for access, freedom from flooding, away from sources of contamination.
Requirements for septic systems typically concern proper design, construction, and maintenance; suitable soil; adequate land area.
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Footings
When preparing the site for a structure, the ground itself forms the bed for the structure's foundation. That part of the foundation which transmits loads directly to the soil is called the footing. The purpose of the footing is to spread the load over a greater area to prevent or reduce settling. The footing holds the entire weight of the building.
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Foundation Walls
The foundation wall sits on top of the footing and is usually about 8 inches wide and made of poured concrete or concrete blocks. If the area between the foundation walls has been excavated deeply enough to provide head room, then a basement has been created. If the foundation area is only partially excavated, then what results is called a crawl space.
The National Building Code requires that the foundation wall of a basement or crawl space and floors that come in contact with soil be treated for ground and surface water seepage by the placement of a vapor barrier.
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What does a footing do?
Supports the entire weight of a structure.
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What is a sill plate and what does it do?
A sill plate is a wooden support member that is laid on top of and bolted to the foundation wall. This sill plate serves as the base for the wall framing.
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What are the types of frame construction? (3)
Platform.
Balloon.
Post and Beam.
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HVAC: Ventilation
The intentional movement of air from outside a building to the inside. Ventilation air is that air used for providing acceptable indoor air quality. When people or animals are present in buildings, ventilation air is necessary to dilute odors and limit the concentration of carbon dioxide and airborne pollutants. Ventilation air is often delivered to spaces by mechanical systems which may also heat, cool, humidify and dehumidify the space.
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HVAC: Types of Heating Systems (6)
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Hot Water Systems.
Steam Systems.
Forced Air.
Electric Heat.
Air Conditioning Systems.
Heat Pumps.
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Hot Water Systems
Hydronics is the name for the use of water as the heat-transfer medium in heating and cooling systems. Some of the oldest and most common examples are steam and hot-water radiators. In any hot water system, the water is heated in a boiler and circulated by means of one or more circulator pumps. A system may be broken up into individual heating zones using either multiple circulator pumps or a single pump and electrically operated zone valves.
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Steam Systems
A steam system delivers steam to radiators or other heating elements where the steam gives up its heat and is condensed back to water. The radiators and steam supply pipes are pitched so that gravity eventually takes this condensed water back down through the steam supply piping to the boiler where it can once again be turned into steam and returned to the radiators.
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Forced Air
Forced air heating is probably the type most commonly installed in North America. The three types of air furnaces are electric, oil-fired, and gas-fired. A forced-air system draws room air through ductwork and a filter into a furnace, where the air is heated. The warmed air is then blown back to rooms through ductwork. The system includes an air filter, blower, heat exchanger/element/coil, and various controls. Like any other kind of central heating system, thermostats are used to control forced air heating systems.
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Electric Heat
Electric heating in homes is usually in the form of baseboard heaters along the walls of a room, although it can be in the form of a heat pump. Electric heating has several advantages: it can be precisely controlled to allow a consistency of temperature within very narrow limits; it is cleaner than other methods of heating because it does not involve any combustion; it is considered safe because it is protected from overloading by automatic breakers; it is quick to use and to adjust, and it is relatively quiet.
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Air Conditioning Systems
Air conditioning systems are combined with forced-air heating units to deliver heat through the ductwork system in cold seasons and cool, dehumidified air for air conditioning through the same ducts during warm seasons.
Air-cooled systems use air as the condensing medium and have a fan that moves the air over the coils. Water-cooled systems use water as the condensing medium and use a pump to circulate the water through the condenser and out to a cooling tower.
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Heat Pumps
The most common type of heat pump is the air-source (air-to-air) heat pump, which transfers heat between the building and the outside air. Higher efficiencies are achieved with geothermal (ground-source or water-source) heat pumps, which transfer heat between the building and the ground or a nearby water source.
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British Thermal Unit (BTU) Ratings
The amount of heat energy needed to raise the temperature of one pound of water by one degree F. BTUs measure the amount of heat an air conditioning unit can remove from the room. As the BTU rating increases, so does the size, weight, and cost of the unit.
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Gas Water Heaters
These units have an insulated tank where water is heated and stored until it is needed. They offer fast recovery times and can offer more economy over electric water heaters. The standing pilot light gas water heater has a pilot light which remains lit 24 hours a day, 7 days a week and consumes gas to stay lit, while a gas-fired water heater with electronic ignition only lights a pilot light when it necessary to fire the main burners.
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Electric Water Heaters
Storage tank units and are very popular because they are inexpensive and easy to install. Electric heat is 100 percent efficient, but the cost per KWH of electricity is more than the cost of using a gas-fired water heater. Electric hot water heaters are also slow to recover as compared to gas-fired water heaters. However, maintenance of the electric water heater is easier as it requires very little maintenance.
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Tankless Hot Water Heaters
"On-demand" water heaters.
When the consumer opens the hot water faucet, a flow switch senses the flow of water, and the water heater fires up and begins heating the water passing through its heat exchanger. Within seconds hot water comes out of the faucet. There is no tank to maintain or worry about leaking in the future. These systems are economical and last many more years than a regular water heater with a tank. They require little maintenance. Since they are on-demand, the tankless water heater only uses fuel when hot water is needed.
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Solar Hot Water Heaters
Generally composed of solar thermal collectors, a fluid system to move the heat from the collector to its point of usage. The system may use electricity for pumping the fluid and have a reservoir or tank for heat storage and subsequent use. The systems may be used to heat water for a wide variety of uses, including home, business and industrial uses.
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Types of Pipe
Cast iron - Used for underground drainage systems.
Galvanized - Used for hot and cold water supply lines.
Copper - Used for both water supply lines and drainage.
PVC - Used mostly in areas where hard water is a problem.
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Voltage
Measure of how much pressure the electrons in a circuit are under.
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Amperage
Measure of a number of electrons moving through the circuit.
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Types of Heat Pumps (2)
Air Source.
| Ground Source.
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What is the most common type of heating system in North America and how does it work?
A forced-air heating system is the most common. It draws room air through ductwork and a filter into a furnace, where the air is heated. The warmed air is then blown back to rooms through ductwork.
