Restrictive Covenants in Real Estate Explained
When buying a home, you might find some rules prevent you from doing certain things with the property. Many homes have restrictive covenants that limit what you can do when owning the property.
There are two types of house covenants; positive and negative. A positive covenant is something you have to do, and a negative covenant is something you aren’t allowed to do.
Restrictive covenants can be used in many situations, not only in real estate. Covenants can feature in loan documents, employment agreements, bond obligations, and many other types of contracts.
For purposes of this article, we will cover everything about restrictive covenants and how they pertain to real estate sales.
If there is a restrictive covenant on the home you are going to buy or rent, you will need to follow the requirements. These covenants are intended to maintain the development and ensure the actions of some residents don’t negatively affect the value of homes.
Restrictive covenants will be attached to the deed or in a declaration of restrictive covenants. Homeowners associations also have covenants designed to preserve the community and property values.
Covenants should be reasonable and beneficial to the property owners; otherwise, they might not be considered valid.
Property covenants could deal with issues like the following:
- Property usage
- Number of occupants
- Pets allowed
- Landscaping requirements
- Fence type and height
- Building dimensions and setback lines
- Exterior maintenance
- Vehicles allowed on the property
Covenants like these are only enforceable if they do not violate the owner’s rights or conflict with federal and state laws. They also cannot be applied arbitrarily or inconsistently.
Here are additional examples of restrictive property covenants that are commonly found in real estate deeds.
Restrictive Covenants and Segregation
In the past, restrictive covenants have been used to segregate communities. They sometimes restricted specific demographics from purchasing homes in particular communities. This promoted racial and cultural segregation and prevented groups from mixing.
Under the filings of restrictive covenants, Black or Jewish families were prevented from buying homes in certain areas. These restrictive covenants stipulated that only someone of the White race could live in the area unless they were servants.
In Washington State, in the early part of the 20th century, these sorts of covenants were used to force Jewish, Black, and Asian families away from specific areas. This often led to these groups segregating in their communities.
Following World War II, the Supreme Court ruled that provisions like these were unconstitutional, thanks to equal protection laws.
Even with this ruling, there are still racial deed restrictions on the books in most states, though they are not enforceable.
Racially motivated covenants were a disgusting part of our history. Believe it or not, the National Association of Realtors encouraged this behavior with their members.
These times were a dark part of our history that, thankfully, has changed.
The Fair Housing Act is Established
When you rent or buy a home, you are protected from discrimination. The Fair Housing Act ensures that there isn’t discrimination when buying, renting, applying for a mortgage, seeking housing assistance, or anything related.
Discrimination based on race, origin, gender, religion, sexual orientation, disability, and whether you have children or are about to are all covered by the act.
Real Estate agents who violate fair housing laws could be subject to losing their license to practice.
Enforcing Restrictive Covenants
When you live in an HOA-managed community, they will enforce the restrictive covenants. This enforcement might mean that the HOA fined the homeowner, with the association beginning legal proceedings if the fine isn’t paid or the situation resolved.
Individual owners also have the right to enforce the covenants in a property deed.
However, if a restrictive covenant isn’t enforced, the right can be lost. So if there is a restriction on the number of cars that can be parked on the property, and the homeowner repeatedly ignores this, the HOA might not be able to do anything about it a few years after the infringement began.
“Laches” is a legal term for an unreasonable delay in making a claim and could mean the homeowner can continue to ignore the restrictive covenant if nothing is done.
In some states, the restrictive covenants can expire after a specific period of time if they have not been legally extended. For example, in Massachusetts, covenants can expire after thirty years.
In other states, it is unlikely that property covenants will have unlimited expiration dates.
Final Thoughts on Covenants
If the home you buy has some restrictive covenants in the deed, you need to be sure you are okay with what they require. It can mean that you need to do certain things and avoid others.
If you don’t follow these rules, you could be fined by the HOA or face legal action. While many of these covenants won’t make much of a difference to you, something like a restriction on pets could mean that buying the home isn’t going to be right for you.
So, before you decide to buy a home, make sure you are aware of any property covenants that will apply to you.
About the author: The above article on “What Are Restrictive Covenants in Real Estate?” was written by Bill Gassett. Bill has been working in the real estate industry for the past thirty-three years. He works for RE/MAX Executive Realty in Hopkinton Massachusetts. Bill loves providing trustworthy information to buyers, sellers, and fellow real estate agents to make the best possible decisions. His writing has been featured on RIS Media, National Association of Realtors, Inman News, Placester, Today.com, Credit Sesame, and others.
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