Not every real estate deed gives you carte blanche to do whatever you want. In some cases, buying property comes with certain conditions that prohibit you from doing certain things.
These stipulations are known as real estate deed restrictions, and this is how they work.
Why they're there
Real estate deed restrictions are written into a property's deed and can take the form of conditions, covenants, and restrictions (sometimes called "CC&Rs"). The property's past or present owner, developer, builder, neighborhood, or homeowners association usually imposes them.
Deed restrictions are usually aimed at ensuring that there is an aesthetic uniformity between your property and neighboring properties and that certain other activities are limited. Reasons for including these restrictions may be to maintain the value of a property or to promote good relations within a residential community.
Deed restrictions vary widely and usually depend on the community the property is in and the type of property it is. Some common building and renovation deed restrictions can prohibit or limit the following:
- The size and number of additional rooms and structures
- What materials the structures can be made of
- Proximity to other structures, properties, or streets
- The density of buildings per acre
- Style of homes allowed
- Exterior paint colors
Here are some other common deed restrictions:
- Rules about pets (such as how many you can keep and under what conditions)
- Fees for road maintenance or amenities
- How or if you can run a business from home
- How or if you can rent out your home
- No outdoor storage
- Rules for maintaining your yard
These are just a few examples -- you should carefully review all of the restrictions before signing anything.
How they're enforced
The people who are likely to enforce any deed restrictions are those who originally imposed them. For example, a developer would want to enforce any building or renovation restrictions while it is finishing building the complex in which you purchased a unit.
Neighborhood and homeowners associations are likely to enforce deed restrictions with fees for properties such as townhouses or condos. In the absence of such associations, neighbors can seek to enforce the restrictions by means of lawsuits.
Researching deed restrictions
To find out whether the property you are hoping to buy has any restrictions, ask the owner or agent to provide you with the details. You can also check with the local county clerk. Go over the title abstract, which shows details of deeds for the past 50 years, ensuring that any restrictions haven't been left off the current deed. If you're buying a homeowners association property, it should be able to tell you about rules and restrictions.
If you are pressed to make an offer on the property before you have had a chance to read the deed restrictions, insert a contingency clause in your offer stating that you are to be given time to read the conditions and have the ability to back out of the contract if you disapprove.
Updated from an earlier version by Ben Apple
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