For most people, buying a piece of land is a simple proposition: pay the money, file the deed, and the property is yours. Deed restrictions, though, make it clear that the world of real estate transactions is rarely so simple. Simply put, deed restrictions limit what you can and can’t do with your home. A common tool for homeowners associations to maintain uniformity in the neighborhood, deed restrictions can be added by parties such as the builder or developer, the homeowners association, or even a previous owner. Once a deed restriction is put in place, it can be very difficult to have it removed, and in many cases removal may be impossible.
Understanding Deed Restrictions
Deed restrictions may be referred to using a number of terms, so it’s important to carefully review the paperwork to assess precisely what you’re restricted from doing. Many deed restrictions are referred to as covenants or restrictive covenants.
Because a deed restriction is essentially a contract—an agreement into which you freely enter by virtue of purchasing a property—these restrictions can cover a wide number of issues. Some common deed restrictions include:
- Homeowners association covenants governing how your property looks, which plants you can use, how and when you can paint your home, and in what condition you must maintain the exterior of your property.
- State, county, or local rules about what you can have on your property, such as a limitation on pets or livestock.
- Rules about the materials from which your home can be built.
- Rules about whether and how you can run a home-based business.
- Rules governing the addition of more rooms, addressing how close your home can be to other properties, and governing whether, when, and how you can have construction projects performed on your home.
Deed restrictions are generally legal, even if they severely constrain your rights to enjoy your property. When a deed restriction violates a clearly established Constitutional provision, though, a court may declare it invalid. For instance, deed restrictions prohibiting the sale of the home to non-white owners were common during the era of Jim Crow segregation, but laws such as the Fair Housing Act prohibit these unconstitutional deed restrictions in contemporary real estate transfers.
How to Find Out if a Property Has Deed Restrictions
The easiest way to learn whether a property has any deed restrictions is to ask the seller, who is obligated to tell you of any deed restrictions he or she is aware of. If you don’t have time to explore potential deed restrictions prior to entering escrow or agreeing to purchase a property, your purchase offer should make it explicitly clear that your offer is made contingent upon there being no deed restrictions. Simply insert a contingency clause into your formal offer; your lawyer or real estate agent can help you with this relatively simple process.
If you’re curious about a property’s status or want to learn whether it has any deed restrictions before approaching the owner about a purchase, visit your county clerk’s office, and ask to see the deed abstract. This is a public record, which means you’re entitled to view it, and will show the restrictions added to the property over the last 50 years.
It’s important to do a deed abstract search for any and all properties you consider buying, since any property can have deed restrictions. Some properties that are especially likely to have deed restrictions, though, include:
- Townhouses and condominiums
- Properties in gated communities
- Properties in communities governed by a homeowners association
- New properties built in a large batch by a developer
- Properties in a community where all of the homes or gardens look similar
How are Deed Restrictions Enforced?
You might think that a deed restriction is a mere formality, or perhaps a throwback to a bygone era when neighbors were more concerned about their lawns, or the uniform appearance of their homes. But a deed restriction acts like a restriction on your ownership of the property. If you fail to abide by the restriction, you could end up losing your home, though a variety of other penalties might apply.
So who enforces deed restrictions? It’s usually the person who put the restriction on the property in the first place—often a developer, builder, or local government. Far and away the most common enforcer, though, is the homeowners association. Homeowners associations have the power of enforcement, but also the power of awareness. Since members of the HOA typically live in your neighborhood, and because aggrieved neighbors can effortlessly report your violation to your HOA, if your homeowners association is the agency charged with enforcing the deed restrictions, your odds of getting caught if you break the rules are exceedingly high.
You can face a number of penalties. Usually those penalties start as relatively minor hassles, steadily escalating to more serious penalties. Common penalties include:
- Requirements that you fix the violation. For instance, if you build on an illegal third room to your home, your HOA could require you to remove the addition.
- Fines. You can be assessed a variety of fines.There may be a standard fine amount, or the fine may depend on the violation.In some cases, the fine may be a percentage of the value of your home, or may grow larger for each day you’re in violation of the deed restriction.
- Lawsuits. If you refuse to comply with the deed restriction, the party who placed the restriction on the deed can sue you to enforce your obligation. If you lose, you might have to pay the other party’s attorneys fees and court costs, in addition to covering the litigation expenses of your own attorney.
- Eviction. Some homeowners associations have the power to evict you for violating a deed restriction. If you violate a restriction that prohibits you have hosting tenants, the HOA could evict your tenants, depriving you of income and potentially exposing you to lawsuits from the tenants.
- Foreclosure. You won’t be foreclosed upon overnight, but homeowners associations are increasingly using foreclosures to get wayward homeowners to come into compliance. HOAs are increasingly aggressive at enforcing the law.
One of the challenges of deed restrictions is that the cost of fighting these restrictions can be prohibitively expensive, particularly if you lose and are stuck paying fines, interest, or attorney’s fees. Consequently, it’s often wise to just give in, rather than fighting the restriction, since fighting for years can cost you so much money that you eventually lose your home. Of course, if the deed restriction is truly unfair, illegal, or unethical, you can and should fight it.
Can Deed Restrictions Be Removed?
Whether or not a deed restriction can be removed depends on the deed restriction itself. If you’re hoping to have a restriction removed, look at the deed itself. Some restrictions come with expiration dates. Others are the result of HOA or community bylaws. Review these bylaws carefully, since many outline the specific circumstances under which deed restrictions can be enforced.
If the deed doesn’t allow a clear path out of the restriction, then you’ll have to go to the person or entity who placed the restriction on the deed in the first place. Since a deed restriction is akin to a contract, if the other party agrees to remove it and puts that agreement in writing, the new agreement will supersede the previous restriction. Often this requires a vote by your HOA, or if the restriction comes from a local government, a vote of approval by a zoning board or city council.
If it’s a developer who put the restriction on your property, you’ll need to get in contact with him or her instead.
Rarely, deed restrictions are so restrictive that they’re illegal. Because you can contract to do things you might not otherwise be forced to do, though, these situations are relatively rare. For instance, it’s perfectly acceptable for your HOA to require you to plant a certain variety of flower. But if you have a disability, your HOA can’t prohibit you from building a wheelchair ramp. Deed restrictions that are prohibited by law include restrictions that:
- Pose a serious public safety hazard
- Violate fair housing laws
- Violate local community laws, especially zoning laws
- Violate federal regulations designed to prevent discrimination, such as the Americans With Disabilities Act, which requires “reasonable accommodations” for disabled individuals to live full lives.
If you believe the restriction is illegal or unconstitutional, talk to the other party first. If he or she is unwilling to budge, you’ll need to hire a lawyer to sue. Though this can be a long and protracted process, you may be able to recover attorney’s fees, court costs, and even damages if you win—particularly if the the court determines that the restrictive covenant was discriminatory or otherwise unconstitutional.
Do Sellers Have to Disclose Deed Restrictions?
Sellers are generally required to disclose deed restrictions, and sellers can’t willfully obfuscate such restrictions. The laws governing when a seller has to disclose the restrictions and how he or she has to do so vary from state to state. Generally speaking, it’s sufficient for the seller to put information about the restrictions into other real estate documents; he or she does not have to verbally tell you about the restrictions or explain to you what they mean.
In Florida, for instance, Section 720.401 requires that sellers of properties sold in communities with homeowners associations must provide a disclosure summary to the buyer prior to the execution of a sales contract. The state offers forms for doing this, but does not require the seller to use these forms; the seller must, however, provide information substantially similar to that requested by Florida’s disclosure forms.
If you’re concerned that there might be a deed restriction on the property, the time to address the issue is prior to the purchase. Consider contracting with a skilled real estate attorney who specializes in removing these restrictions, since doing so can save you a serious headache if you eventually decide the covenants are too restrictive.