{"id":1544,"date":"2021-07-19T10:00:24","date_gmt":"2021-07-19T14:00:24","guid":{"rendered":"https:\/\/www.deeds.com\/articles\/?p=1544"},"modified":"2024-04-25T23:19:59","modified_gmt":"2024-04-26T03:19:59","slug":"can-a-homeowner-get-around-a-deed-restriction","status":"publish","type":"post","link":"https:\/\/www.deeds.com\/articles\/can-a-homeowner-get-around-a-deed-restriction\/","title":{"rendered":"Can a Homeowner Get Around a Deed Restriction?"},"content":{"rendered":"\n
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As a traditional rule of law, other people shouldn\u2019t be able\nto restrict our enjoyment and use of our property. This is why the rule\nagainst perpetuities<\/em> prevented people from using deeds to control their properties\nafter their deaths. According to this traditional rule, future generations\nshould not have to live with contingencies placed on them by someone else\u2019s\n\u201cdead hand.\u201d <\/p>\n\n\n\n

It\u2019s part of a broader principle: the rule against\nunreasonable restraints on alienation<\/em>. After property is conveyed, the new\nowner should have full rights to it. A previous owner shouldn\u2019t control how or\nto whom the new owner sells or rents it out. So, a court might nullify a deed restriction\nthat forbids a homeowner from renting the house. Or the court might override a\nrestriction on a gift house that the recipient can\u2019t sell, alter, or share.<\/p>\n\n\n\n

The original rule throughout most states was that no\nrestraint on alienation would be upheld. Policies have changed. The rule\nagainst perpetuities has been modified by many states and repealed by a few.\nAnd today, the courts of most states typically leave reasonable<\/em>\nrestraints on alienation in place. What\u2019s reasonable? That depends upon the facts\nand circumstances of a particular case. <\/p>\n\n\n\n

Some deed restrictions are relatively minor: no keeping of\nexotic animals; certain colors of paint to preserve the character of the\nneighborhood; and so forth. No matter how minor or sweeping, a deed restriction\nis a binding contract. By signing the closing paperwork, the buyer agrees to\nabide by it.  <\/p>\n\n\n\n

In some contexts, deed restrictions are generally considered\nreasonable across the board, and owners must accept them and live with them. Here\nare some of the most common examples.<\/p>\n\n\n\n\n\n\n\n

Condo Properties: Covenants, Conditions & Restrictions (CC&Rs)<\/strong><\/h2>\n\n\n\n
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They can tell unit owners what to plant and where to park.\nBut can homeowner\u2019s associations (HOAs) place covenants, conditions and restrictions\non property transfers? Condos and some residential subdivisions have\nassociations that make rules about sales. They may also impose restrictions on\nunit owners who become delinquent in dues or assessments payments.<\/p>\n\n\n\n

Can the homeowners fight those restrictions? It depends. Is\nthe restriction reasonable? The courts in a given state typically apply a\nreasonableness test when the individual unit owner\u2019s interests compete with the\ninterests of the association as a whole.<\/p>\n\n\n\n

Restrictions that unreasonably<\/em> restrain a homeowner\u2019s\nprerogative to transfer the property, or that place an undue burden on many\nowners, could be challenged in court. The attorney for a homeowner might claim\nthe association is unreasonably restraining the unit owners\u2019 right to transfer their\ncondo units to, say, investor owners, or to someone the association hadn\u2019t approved.\n<\/p>\n\n\n\n

When you look up your state\u2019s Condominium Act, you might\nfind that homeowners\u2019 associations are permitted to vet buyers and renters. Criminal\nbackground checks are standard in some communities, in the interest of community\nsafety and well-being.<\/p>\n\n\n\n

HOAs may also cap the number of investor properties, or mandate\nminimum lease periods. It\u2019s generally reasonable for a property to discourage a\nhigh percentage of absentee owners, and to limit short-term residency. Keeping\na lid on noise and disruptions makes sense from the association\u2019s perspective. Especially\nif the condo property is on the FHA-approved list, it will have rules governing\nthe percentage of units that must be owner-occupied.<\/p>\n\n\n\n

Thus, while condo deed restrictions are<\/em> restraints on\nalienation, they are usually valid. After all, the association also has legally\nprotected interests. Moreover, the property values and collective expectations\nof the unit owners must be taken into account.<\/p>\n\n\n\n

Condo buyers generally expect to make compromises in return\nfor their enjoyment of common services. They can expect to face some limits on their\nright to dispose of their units. And voting unit owners may have the ability to\nmodify the restrictions and covenants. Being able to vote on a restriction adds\nto its reasonability factor. That said, state law may say restrictions only\nbind owners who acquire their deeds after<\/em> the effective date of the\nrestrictions \u2014 giving buyers the opportunity to consent to them.<\/p>\n\n\n\n

As a general matter, then, the HOA\u2019s Declaration of CC&Rs\nis legal and binding. <\/p>\n\n\n\n

\u261b<\/em><\/strong> <\/em><\/strong>Note: <\/em><\/strong>When restrictions\noffend federal or state laws (such as the Fair Housing Act), they are not\nvalid. They can be repudiated through a notarized deed addendum\ncalled a termination and release. Learn\nmore about discriminatory deed restrictions here<\/a>.<\/em><\/p>\n\n\n\n

Deed Restrictions for Affordable Housing<\/strong><\/h2>\n\n\n\n

In some cases, cities mandate deed restrictions on certain\ndevelopments, so at least a percentage of the homes are relatively affordable.\nCC&Rs for affordable housing may bind developers for a period of years, and\nput income caps on homeowners. They may also prevent owners from renting out the\nproperties, gaining income through Airbnb-type arrangements, or selling their\nhomes at market or above-market prices. They may also include provisions for\nthe homes to be inspected for compliance with the rules.<\/p>\n\n\n\n

Further, they often establish a governing body to screen\nfuture buyers for things like income status. This means the homes can\u2019t be sold\nor otherwise transferred without the city\u2019s permission.<\/p>\n\n\n\n

Dedicating a portion of home properties in a city to\ncontinued affordability has a few drawbacks, in a sense. It caps the market\nvalue of these homes and probably lowers \u201ccomparable\u201d values in their\nsurrounding areas. On the other side of the coin, the restrictions are meant to\nachieve valid public goals: <\/p>\n\n\n\n