Examples of Restrictive Covenants in Real Estate
When you are buying a home for the first time there is a significant amount of things you probably don't know. Let's face it, buying real estate is a learning experience.
One of the things you should be aware of when buying in a neighborhood or subdivision is whether or not there are house covenants or restrictive covenants. Covenants are rules that you need to follow.
We will take an in-depth look at everything you need to know about restrictive covenants. By having this information at your fingertips you'll be able to decide if living with property covenants are a good move for you.
A restrictive covenant is a legally binding agreement between a property owner and another party that limits or restricts the activities of that party on the property.
They are often referred to as covenants, conditions, and restrictions or CCRs for short.
Restrictive covenants are usually instituted when a developer constructs a neighborhood. The primary purpose of having housing covenants is to protect the home values of all the property owners in the neighborhood.
Some people love having covenants while others may think of them as overbearing rules they are not interested in following.
As a potential home buyer, it is essential that you review the restrictive covenant agreement before moving forward with a purchase.
It is likely the covenants will be in force for a considerable amount of time as they become part of the deed to the property. The future owner will also have to abide by them.
Housing covenants are most often seen in neighborhoods where there is a homeowners association (HOA) present. However, an HOA and its fees do not have to exist for there to be covenants.
Let's look at some of the types of restrictive covenants you are likely to encounter.
One of the most common housing covenants is restrictions on the size of a home you can build. A square footage restriction is put in place to keep some semblance of uniformity in house sizes.
For example, it would not be good for a neighborhood if most of the neighborhood had 4000 square foot homes and someone was allowed to construct one for half that size.
A 2000-square-foot home in a neighborhood predominantly consisting of larger homes could bring everyone's home values down.
Usually, there is not more than a variation of 1000 square feet in a neighborhood. Imagine someone buying a lot and building a tiny house. It's likely the neighborhood would be up in arms.
In some neighborhoods, builders don't want home designs to be out of the ordinary for what is considered traditional construction.
For example, in New England, the predominant housing styles are colonials and capes. Many builders have put restrictions into their covenants that a contemporary-style home could not be built.
Another example would be prohibiting someone from building a split-level home in what would be considered a more upscale neighborhood. For many years, split-level homes have been known as a less desirable housing style.
Other housing choices like shipping containers or modular homes may not be permitted.
Another common restrictive covenant is prohibiting owners from raising livestock. In a residential neighborhood, there are many people that would not want to look at cows and chickens running rampant.
Developers often place livestock restrictions in their agreements. It is also not uncommon to see some forms of household pets outlawed.
Dangerous dog breeds such as pit bulls or rottweilers are often discouraged. Sometimes there are imposed weight limits or size restrictions on pets.
There are many folks that don't want to be looking at someone's RV or camper parked in the driveway. Restrictions on commercial vehicles being parked in the yard is often part of restrictive covenants.
Another type of covenant that looks to keep uniformity within a neighborhood is restricting the types of fences and outbuildings.
For example, if the developer has built white vinyl fencing for numerous homes, it may look unsightly if a few others decide to have a chain link fence.
The same can be said for the types of sheds or other outbuildings. Covenants like these try to keep things consistent throughout the neighborhood.
Here are a few other types of restrictive covenants:
Yes! Covenants that violate the Federal Fair Housing Laws are illegal and not enforceable.
Specifically, racially restrictive covenants are illegal. Our country has a dark past when it comes to racially motivated covenants.
Believe it or not, up until the 1960s there were covenants that restricted parties based on race, color, and creed. Fair Housing made all of that illegal.
Today, neither real estate agents or owners can discriminate based on race, color, national origin, religion, familial status, disability, sexual orientation or gender identity.
Realtors caught participating in any of these forms of discrimination could lose their real estate license.
When buying a home or condo, it is vital to learn about any existing covenants. You will need to decide whether you can live with them or not.
If you have never purchased in a neighborhood, you may find following the rules a challenge.
Jerry Sullivan, Broker, and PJ Louis, General Manager of CENTURY 21® Blue Marlin Pelican recently announced Sandy Early as…
If you're in the real estate business, you need to understand how to get your…
Moving can be an incredibly stressful process, especially if you’re not prepared. Whether it’s your…
JPAR® – Real Estate is pleased to announce that five (5) of its sales associates…
Have you been looking for ways to take your real estate business to the next…
When you’re trying to purchase a house, it can be a stressful process. You want…
