How Do Restrictive Covenants Affect the Buyers of Homes for Sale?

Restrictive covenants (also called deed covenants) have been affecting buyers of real estate for as long as property has been transferring ownership. Such covenants are a condition of sale for real property, placed on the buyer by the seller or passed on from previous owners. By purchasing the property, the buyer agrees to abide by these restrictions on the use of the property.

Restrictive covenants are especially important to buyers of homes for sale; since they, like zoning laws, restrict how you may use your own property. Where city officials enforce public zoning laws, private parties enforce restrictive covenants — generally a homeowners association or individuals who are affected by violations.

Restrictive homes for sale covenants protect the value of the home, itself, as well as the properties surrounding it. Some homes for sale covenants protect the people who live in close proximity to the property, such as other condominium or townhouse owners.

In earlier and not so charitable times, such covenants restricted to whom you could sell your home. Upscale areas of a city wanted to keep their neighborhoods free of particular races or ethnic groups. In the ‘50s and ‘60s, such covenants were deemed unconstitutional by the 5th and 14th Amendments to the U.S. Constitution, as well as unlawful by federal and state statutes.

Now, such homes for sale covenants are imposed to maintain a certain character and appearance of the neighborhood. Some examples are not being able to erect a chain link fence around your home, satellite dishes must be out-of-sight (a hard thing to do, if they are to function properly), you cannot park recreational vehicles at your home, or you cannot pitch a tent in your backyard for your children. Some homes for sale covenants are very restrictive — for example, you cannot leave your trashcan in the street for more than one hour after trash pickup. Some homes for sale covenants dictate the maximum length of your grass or the exterior color of your home. Some control such mundane things as what type of pet you can own (if any), and during which hours of the day you can vacuum your carpets.

Violations of homes for sale covenants have serious consequences. You may be fined for most offenses; however, costly lawsuits have occurred from unresolved violations.

It is not the seller’s responsibility to alert a buyer to restrictive covenants on homes for sale. The restrictive covenants generally are on file with the county in which the homes for sale is located. During the purchase process, a title search or abstract update should expose and highlight any covenants for the buyer and his/her real estate attorney to review before the purchase of the homes for sale.

Unfortunately, this process does not occur until after a homes for sale buyer has made an offer. That means a buyer always should check for restrictive covenants BEFORE making an offer on a homes for sale, or AT LEAST make the offer subject to review and acceptance of all covenants.

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