Covenants & Restrictions and Buyer Intentions for Land Use & Development

“What do you mean I can’t raise chickens on the property I recently purchased?” 

It may sound humorous, but little can be more disheartening to a new homeowner than to learn that the use and development of their land - the dream for their investment - may not be possible due to restrictive covenants which affect their land. 

Commonly known as “restrictions”, restrictive covenants are provisions contained in real property documents that limit, regulate or totally prohibit a particular use or development element for the land of which they are a part. Restrictions may be found in a deed vesting ownership in the chain of title, or in a separate instrument sometimes referred to as “Declaration of Covenants, Conditions and Restrictions” the terms of which affect the property for the advantage of neighboring properties or restrict use in a subdivision to promote commonality of land use in a community. These covenants may also be depicted and described on a recorded plat for the property or, outlined as part of a larger development, as is often the case in Planned Community and Condominium Developments.

As part of the closing process, buyers may be informed that some properties, even those that are not in a subdivision or subject to a homeowners association (HOA), may have restrictions and covenants contained in a prior deed or otherwise imposed by law. They may also be asked to acknowledge that:

  1. The real estate they are purchasing may have covenants and restrictions and may be subject to zoning laws and that they have had an opportunity to inspect the zoning laws and public records affecting the property.
  2. They are satisfied that the applicable zoning law, restrictions, or covenants, if any, will not affect their intended us or enjoyment of the property.
  3. They are relying on their own judgment as it relates to matters of the use of the property they are purchasing, and not that of the seller; the title insurance underwriter; the title agency; settlement agent/attorney; or those companies’ employees, officers, or agents.

Of course, our firm’s suggestion would be that while buyers may acknowledge their understanding that restrictions may exist at their real estate closing, it’s important to discuss your intentions for land use and development and restrictions that exist for the property you’re considering early in the property selection process. 

Discussions and possibly research into the matter would ensure surprises or disappointments about restrictions do not occur at closing. To learn near the end of a real estate transaction, or even worse at closing, that a conflict exists between the buyer’s intentions and the restrictions for the property the buyer is attempting to purchase is definitely not ideal. By the time closing occurs, the parties have already spent much time, effort and often money to get to the closing table and then discover that chickens are not allowed on the property.  

Published by Wendy Hughes on October 24, 2016