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Utah Real Estate: Who Controls Property Rights and Use?

By Benjamin T. Beasley

Ben Beasley is a partner at the law firm of Freeman Lovell. His practice is focused on business, finance, and real estate law. He received his juris doctor degree from Harvard Law School. 

Contact Ben at benjamin.beasley@freemanlovell.com.

Real estate property rights are a fundamental aspect of life for most Americans. It may seem like it should be obvious that the owner of a piece of real estate has the right to control what happens with their property. However, as many property owners have discovered, there are many other decision-makers that must be considered when thinking about what rights are available to the title holder of a parcel of real estate in Utah.


Generally speaking, the owner of real property does have the right to do with it as they wish, absent any superseding rights or right holders. But that’s the rub: there are almost always superseding rights holders and other legal issues that play into land use. In Utah, there are several key places that an owner of real estate should look to determine what issues may arise and what rights he or she may actually possess.


Real estate rights are often compared to a bundle of sticks. Each stick in the bundle represents a certain right associated with the real estate – for example, one stick could be the mineral rights; another stick could be the right to cross a certain portion of the ground; another stick could be a utility easement; another stick could be for a canal; another stick could be an existing purchase option; another stick to be development rights or restrictions. In reality, there is an almost infinite number of ways to divide up rights to real property. Considering what “sticks” may have been granted, sold, or otherwise taken is an excellent first step in considering what an owner of real estate can do with their property.​


Rights that have previously been sold or granted to a third party​


Just because a person has a deed to a certain parcel of ground or a dwelling does not mean that they possess every single right related to that property. In fact, it is virtually certain that a number of rights were previously transferred away from the deed holders in the chain of title leading to the current owner. These are usually recorded in county real property records. If a prior owner of title transferred away a right (for example, by granting an easement to a third party), then the subsequent owners of the property would not receive that right – the title to that right would remain with the person or entity that received it, and they may have transferred that right on to other rights holders. One very typical example is utility easements: nearly every parcel has granted to utility companies the right to enter the property, maintain utility lines, and/or prohibit destruction or impediment of lines or building on them. Those rights thus encumber the real property and normally remain with the utility company, and can be passed on to its successor companies.​


Many, many other rights are often typically granted over time. The easiest way to discover these is to perform a title search and then review the documents to see exactly what has been recorded against the property.​


Land use authorities​


Governmental bodies have rights over real estate within their jurisdictions and can make decisions that have extreme effects on property owners. Land use authority in Utah means  “(a) a person, board, commission, agency, or body, including the local legislative body, designated by the local legislative body to act upon a land use application; or (b) if the local legislative body has not designated a person, board, commission, agency, or body, the local legislative body.” Utah Code § 10-9a-103(24). This is where laws like zoning codes come from.​


Use laws are designed to prohibit certain uses in some areas, while encouraging other uses, and have developed over time. For example, an owner of residential real estate in a neighborhood may be prohibited from using the property for heavy industrial uses that would harm the ability of other landowners to have quiet enjoyment of their land.


​Land use authorities take different forms in different local governmental organizations. In municipalities, the city council is typically the authority. In counties, it is the county commission. But these often delegate their authority, or there may be a different one altogether, such as a planning commission, legislative body, or another designated body. This can also change depending on what type of decision is to be made or how local ordinances are structured. Reviewing city or county codes, and Utah state law is typically a good first step in determining who has jurisdiction, how they exercise that jurisdiction, and what land use authority will make decisions. ​


The initial decision is made by the land use authority, often with input from local government staff and personnel. Appeals can usually be made if the decision of a land use authority is not in line with that requested by a landowner. Under Utah law, “’Appeal authority’ means the person, board, commission, agency, or other body designated by ordinance to decide an appeal of a decision of a land use application or a variance.” Utah Code § 10-9a-103(2). This is normally a board of adjustment. Once administrative remedies have been exhausted (i.e., all steps provided for in appeals within the land use authority), a landowner may appeal to state court: first, district court, and it also has its appeals process, the Court of Appeals and then the Supreme Court. However, each appeals step is less likely to grant the request of the property owner, so he or she should do everything they can to get a ruling in their favor at the first step.​


Enlist a Utah Real Estate Attorney​


Our deep Utah real estate law knowledge can help you with all aspects of your real estate needs. Whether you are seeking to buy, sell, develop, or research real property in Utah, or have a dispute with another person or entity, we are available to discuss your options and answer your questions at an initial free, thirty-minute consultation. Call us at (801) 477-6838 for a free consultation. You can also email Ben at benjamin.beasley@freemanlovell.com, fill out a contact form below, or set up an appointment to meet at our offices. We look forward to helping you.

28 Dec, 2023
In a couple of months, a new rule will take effect, requiring all registered legal entities to report their beneficial owners to the Financial Crimes Enforcement Network (FinCEN). We wanted to give you a heads up about the rule and give you as much information about what it means to you. What is the rule? The rule, which is called the Beneficial Ownership Information Reporting Requirements (BOI Rule), comes from the Corporate Transparency Act, which was passed by Congress in 2021. This law created the BOI Rule with FinCEN as part of the U.S. government’s efforts to make it harder for bad actors to hide or benefit from their ill-gotten gains through shell companies or other deceitful ownership structures. Under this new law, FinCEN will permit Federal, State, and local officials to obtain ownership information for authorized activities related to national security, law enforcement, and intelligence. When does the rule take effect? And when do I have to submit a report? The BOI Rule takes effect on January 1, 2024 . If your company existed before January 1, 2024, you must file its initial beneficial ownership information report by January 1, 2025. If your company is formed or registered after January 1, 2024, you must file its initial beneficial ownership information report within 30 days after receiving actual or public notice that its creation or registration is effective. If any beneficial ownership information changes, you will have 30 days from the day of the change to file an updated or corrected report with FinCEN. What do I need to include in the report? The BOI Rule requires that all entities report information about the company, each individual with substantial control over the entity, and each beneficial owner. What information is required to report about the entity? Full legal name of your company and any DBAs names; Complete current street address for your company's principal place of business (P.O. boxes will not be accepted); The jurisdiction of formation or registration; and Tax identification: IRS tax identification number (TIN) and employer identification number (EIN). What information is required to report about the controlling individuals and beneficial owners? The individual's legal name; Individual's date of birth; Individual's residential address; and A unique identifying number from an acceptable identification document (such as an unexpired driver's license, passport, identification document issued by a State or local government or Indian tribe.) and the name of the issuing state or jurisdiction. Who is considered to have substantial control of the entity? Examples of an individual that exercises substantial control over the entity are: An individual is a senior officer (President, CEO, CFO, COO, Manager, or other office who performs a similar function); An individual has the authority to appoint or remove certain officers or a majority of directors of the reporting company; An individual is an important decision-maker for the company; or An individual has any other form of substantial control over the company. Who is considered a beneficial owner? A beneficial owner is an individual that owns or controls at least 25% of the entity’s ownership interests. This includes individuals that indirectly own or control 25% of the ownership interest. For example, if Joe is a 50% owner of Parent LLC, which in turn owns 50% of Subsidiary Corp, then Joe beneficially owns 25% of Subsidiary Corp (50% of 50% = 25%). What type of entities will be required to file a report with FinCEN? All domestically formed entities and foreign registered entities in the USA are required to file a report. Types of entities include corporations, limited liability companies, limited partnerships, general partnerships, and any other entity registered with a state Secretary of State or Division of Corporations or other similar office. There are some types of companies that are exempt from the reporting rule, and in general they are companies that already have to report beneficial ownership to another federal agency. The 23 exemptions listed by FinCEN are: Securities reporting issuer, Governmental authority, Bank, Credit union, Depository institution holding company, Money services business, Broker or dealer in securities, Securities exchange or clearing agency, Securities exchange or clearing agency, Other Exchange Act registered entity, Investment company or investment adviser, Venture capital fund adviser, Insurance company, State-licensed insurance producer, Commodity Exchange Act registered entity, Accounting firm, Public utility, Financial market utility, Pooled investment vehicle, Tax-exempt entity, Entity assisting a tax-exempt entity, Large operating company, Subsidiary of certain exempt entities, and Inactive entity. Now what do I do to comply with the BOI Rule? While you are not able to submit the beneficial ownership information report until January 1, 2024, you should use this time to gather information about your company, owners, and other entities now, so you can timely file your report. We added a small BOI Rule cheat sheet for you to keep and reference. Also, you can read FinCEN’s FAQ page about the BOI Rule https://www.fincen.gov/boi-faqs . Can you help me with my company’s report? Yes! We are happy to help prepare and file your company’s BOI Rule report with FinCEN. We can begin to gather and prepare the information for your filing right away and be ready once the BOI Rule takes effect January 1, 2024. To get started, please reach out to us. We also know that some situations can be complicated, so please feel free to ask us any questions regarding compliance with the beneficial ownership interest reporting requirements for your company.
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