Restrictive Covenants: Everything You Need to Know

A restrictive covenant is an agreement outlining what a buyer is allowed to do or not do when they acquire the property. Sellers sometimes place these into the contract, and these restrictions must be followed in order to avoid repercussions on the buyer’s side. By signing the agreement, the new homeowner is verifying that they do in fact understand what is being asked of them and promising they will adhere to the rules. Restrictive covenants don’t have any limits when it comes to their context; sellers can write in anything for these and the new owner would have to comply if they decided to close on the property. For example, if a seller wanted to, they could prevent the buyer from installing a fountain in their yard or planting trees over 12 feet tall.

How Are They Created?

A restrictive covenant typically must be created via declaration. A declaration is a document that outlines the activities that are not permitted within a property or within multiple properties. It also outlines the intended purpose of the property. Many neighborhoods and subdivisions have restrictions for the people who reside in them; these are called “Conditions, Covenants, and Restrictions,” also known as CC&Rs. Previously, restrictive covenants were able to be approved with a written agreement or simply by being included in the contract when selling a home. When a seller puts a restrictive covenant on their property, the buyer cannot own said property without abiding by the agreement. Restrictive covenants can be removed; however, it takes more than just the buyer to do this.

What About Zoning Laws?

Every area has different zoning laws and regulations that may or may not interfere with a restrictive covenant. When a restrictive covenant has rules that are less strict than an area’s zoning laws, the zoning laws will be considered first. This means that a person could break a zoning law while still adhering to a restrictive covenant. On the other side of things, if a restrictive covenant has firmer rules than the zoning laws of an area, it will be considered over the zoning laws. In this case, if zoning regulations are altered at a later date and conflict with the restricted covenant, they will not overrule the covenant.

How Are They Enforced?

If a neighbor or other individual who lives nearby a property wishes to enforce a covenant, they may attempt to do so by notifying their community’s homeowners’ association. If a neighborhood is not run by an HOA, an individual may file a civil suit in the case that they believe a rule is being violated. In a court of law, the initial purpose for the creation of the restrictive covenant will be considered above all else, and covenants that conflict with some aspect of the law will not be considered.

How Do I Get Rid of a Restrictive Covenant?

To eliminate a restrictive covenant there are a few things that can be done. If an HOA manages the property, they will have their own set of rules and set processes for dealing with restrictive covenants. If the property is not managed by a homeowners’ association, there will be a vote to decide on the termination of a restrictive covenant. The voting process and rules change depending on the area the property is located in. Other ways to terminate the agreement include obtaining consent from both parties within the agreement or proving in a court of law that the restrictive covenant is attempting to enforce something that is illegal. As discussed, restrictive covenants are agreements put into place by sellers who wish to control what the buyer is able to do upon purchasing their property. If the new buyer does not agree with the set terms, they can try to negotiate with the buyer, but the terms must be agreed to before closing for the sale to go through. Homeowners are given quite a bit of leeway when writing in these clauses as long as they do not state anything that is against the law. If a new buyer signs this agreement and then fails to abide by the terms, they can face legal consequences. If you are purchasing a property that has restrictions, make sure to consider them fully before closing.