Guide to Restrictive Real Estate Covenants – Forbes Advisor

When comparing homes to buy, you may find that some communities have restrictive covenants in place. These housing rules are most common in condominiums, townhomes, planned communities, and subdivisions with a homeowners association (HOA).

Many different types of real estate covenants impose uniform aesthetics outside your unit and limitations on the use of the property within a planned community. Familiarizing yourself with the various property and landlord requirements can help you avoid potential breach of covenant, which can sometimes result in fines.

What is a restrictive covenant?

A restrictive covenant in real estate is a rule that governs the appearance and permissive use of a residential or commercial property. For example, there may be rules regarding paint schemes, landscaping, and the placement of storage sheds.

These agreements are typically issued by a property developer, such as an HOA or condominium association, or privately agreed upon by neighbors. They are not legally enforced by city or county officials, such as zoning ordinances, although private covenant violations can be resolved through legal action or by paying a fine when initiated by a resident or HOA.

These contract terms can be easily found in an HOA’s Statement of Covenants, Conditions, and Restrictions (CC&R). A property deed may also list certain restrictive covenants.

Some covenants naturally “work with the land” and remain in effect indefinitely, even when a house changes ownership. Permanent agreements can only be terminated when the owners reach an agreement or after a favorable vote at the HOA board meeting. Courts can also confirm or terminate a restrictive covenant in certain circumstances.

Types of restrictive agreements

Here are several examples of restrictive covenants that may govern how you can use your home and grounds.

Limitations on Use of Property

Restrictive covenants may be stricter than zoning ordinances regarding the use of your property. Some of the possible bans include:

• Gardens and dependencies: You may not be able to place clotheslines, gardens, pools, and outside storage units on your property.
• Home Businesses: Working remotely for an employer should be fine, but providing services that require clients to visit your home may not be permissible.
• Noise: Loud noises are generally not allowed after a certain time. For example, an HOA may implement quiet hours every day from 10 pm to 8 am. This initiative may restrict large parties or noisy pastimes, such as rebuilding classic cars.
• Recreational Vehicles: Planned communities may not allow RV, boat or RV storage. Additionally, vehicles generally must be parked overnight in the driveway or garage.
• Signaling: Political signs and commercial signs may not be allowed.

Required Maintenance

It is common for neighborhood association agreements to outline maintenance requirements for common areas and “separate interests” (the property you own).

Communities want to maintain a specific appearance and degree of curb appeal. Restrictive covenants can prevent deviations when repairing or replacing items such as these:

• Awnings, covers and accessories
• Driveways and sidewalks
• exterior paint colors
• fence height
• Landscaping and gardens
• Roof condition and style
• window treatments

For example, you may need to replant dead grass and shrubs. You also may not be able to repaint your home a vibrant color when conventions only allow neutral tones. Improvements to the property may require an architectural review to determine if the proposed changes in material and appearance are in compliance.

In addition to defining what landlords can’t do, community bylaws also include affirmative obligations, which are minimum actions you must take, such as mowing the lawn, repainting on a set schedule, or only parking in the driveway.

However, some HOAs consider the areas outside your home their responsibility and will hire landscapers and painters to refinish the outside of your home as part of the monthly HOA fee you pay. That is why it is essential to verify everything that is included in the HOA fee before buying the house.

Property mishaps

You’ll want to verify that all existing and future structures and improvements are built within the designated lines, that is, the space between your property and the property lines. These barriers prevent potential disputes with neighbors if one party places a fence or tree too close.

Setbacks can also provide ample space for utilities and common area use at the edge of your lot. Non-compliant features may be subject to fines and may need to be relocated or removed.

Pets

Most pets, such as dogs, cats, birds, and fish, are normally allowed to live on the property, but each property may have maximum number of animals or weight restrictions.

Additionally, restrictive covenants may prohibit large dogs or certain breeds associated with aggressive behavior, such as Pit Bulls and Rottweilers. Free-range animals such as chickens and pigs may also be restricted.

Rental Property and Tenant Limits

More and more communities ban or limit the number of short-term rentals, like Airbnb, to encourage year-round occupancy.

Some neighborhoods also have limitations on long-term rentals. For example, the minimum lease period may need to be six months, or a new owner may need to own the property for a minimum period before converting it to a rental property.

Other communities may also limit the number of rental properties, such as allowing only one-third of the total properties to rent at a time.

Additionally, HOAs may have the legal right to limit the number of occupants. Associations may also screen prospective tenants, but they must comply with the Fair Housing Act and cannot discriminate on the basis of race, color, gender, religion, national origin, or disability.

What is the purpose of restrictive covenants in real estate?

The main goal of restrictive covenants is for all owners to agree to the same set of rules. A universal standard makes it easy for the community to maintain a consistent look and feel.

These regulations may also deter residents who are unwilling to abide by agreements from moving. In addition, the covenants prevent any prospective homebuyer from putting pressure on the community by not maintaining their property properly or having controversial hobbies and businesses.

Pros and cons of restrictive covenants

Restrictive covenants are used to keep communities in good repair and prevent residents from negatively affecting property values. They provide homeowners and potential buyers with a mix of benefits and burdens.

Advantages of restrictive covenants

• Esthetic: All properties adhere to specific appearance and maintenance guidelines that prevent visual nuisance, making the neighborhood more desirable in which to live.
• Conduct: Every property owner should practice the same personal and business conduct to help maintain a clean and professional reputation.
• Enforceability: Neighbors and associations have a legal contract to enforce the agreements through fines and legal actions to maintain a desirable community.
• Uniformity: Residents know exactly what they can and cannot do, eliminating confusion or favoritism when making repairs or requesting upgrades.

Cons of restrictive covenants

• Lack of freedom: In addition to complying with government zoning laws that affect all homes within a legal jurisdiction, restrictive covenants place additional limits on how you can use your residence and land for personal gain.
• No business or rental income: Entrepreneurs are restricted to the neighborhoods in which they live if they operate a specific type of business. If it’s a second home, you may not be allowed to earn rental income from short-term or long-term tenants, for example.
• Potentially inapplicable: Covenant violations may not stand if a dispute is not filed promptly. Unreasonable restrictions that do not benefit both parties can also be overturned in the legal system.
• selective application: Confusing regulations are more susceptible to selective enforcement, where a handful of owners may receive wrongful exemptions. This relative lack of compliance can reduce property values ​​and create disgruntled residents.