Restrictive Covenants and Why They Matter to You
When buying a home or a piece of property, most people do not expect the big stack of documents delivered to them at closing. These documents often include the Homeowners’ Association documents, plats or maps, and a large document entitled the “Declaration of Covenants, Conditions, and Reservations” (“CCRs”).
Arguably the most important items an owner or prospective buyer should take particular note of are any documents containing restrictive covenants. Restrictive covenants are restrictions tied to the actual property itself which limit an owner’s use of the property and can be enforced by surrounding property owners. Although some restrictive covenants are found in deeds, many are located in the CCRs. Most CCRs are daunting, if for no other reason than their length. But the CCRs often contain vital information about restrictions placed on properties located or built within the neighborhood governed by the CCRs. For example, restrictive covenants may limit your property use for residential purposes, lease restrictions may prevent rental of your home on a short-term basis (think AirBnB), and architectural restrictions may require compliance with a certain type of roof or design style.
In addition to specific architectural restrictions, the CCRs frequently call for creation of an architectural committee (an “AC”). The AC is a board of neighborhood members who, among other things, handle homeowner requests for CCR variances pursuant to the CCR’s. The AC’s authority is significant, and items requiring AC approval under the CCRs should be taken seriously. The AC can, and often will, require an unapproved project to be removed or torn-down even at great cost to the homeowner or builder.
Restrictive covenants on your property, or on a piece of property you are considering acquiring, should be carefully considered and given appropriate attention. Most importantly—READ the CCR’s!