LP&M
LAND PROTECTION & MANAGEMENT INSTITUTE
DEED RESTRICTIONS 101
Deed restrictions are frequently used contractual tools used by landowners and stakeholders to preserve and protect land. Most commonly, they are placed on certain property by a homeowners’ association (HOA) in a neighborhood subdivision. They are also commonly used by community associations in historic neighborhoods. And sometimes, deed restrictions are negotiated between the owners of adjacent properties.
Generally, deed restrictions are put in place to prevent a future property owner from making certain changes to the property or prevent the owner from engaging in certain activities on the property.
DEED RESTRICTIONS: The law
A deed restriction is a legally enforceable written contract which requires a property owner to do something or refrain from doing something with the land. Deed restrictions usually limit the rights of the current owner and any future property owner. They are also commonly referred to as "restrictive covenants".
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Deed restrictions vary from case to case and the different permutations of deed restriction are limitless. They can be very simple or complex. For example, the restrictions may place a limit on the number of apartments the land owner can build on the property. For some owners, this restriction may not be considered too burdensome because the governmentally imposed zoning already limits the number of apartments that can be built on the property.
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In other cases, deed restrictions can be more complicated and onerous. The restriction could prevent a property owner from using their land for certain commercial purposes (eg. no pawn shops, no bars, no convenience stores), building beyond a certain height, or even modifying or destroying structures of historic significance. Some restrictions can also require the owner to protect a certain number of trees from being removed - - thereby limiting the developable and marketable area of the land.
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DEED RESTRICTIONS: Necessary Elements
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In order for the restrictions to be binding upon subsequent owners and assignees of the land, each of these elements MUST be satisfied:
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THE RESTRICTIVE COVENANT MUST BE IN WRITING. Oral agreements are not enforceable. Restrictive covenant promises must be in writing to satisfy the Statute of Frauds. For a covenant that states by its terms that it is to last for more than one year, it must be in writing to be enforceable.
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THERE MUST BE AN INTENT FOR THE RESTRICTIONS TO RUN WITH THE LAND. The intent of the original parties to the agreement must have been for the restriction to run with the land - -binding the successors, subsequent assignees, or purchasers by the same terms. If the language of the document creating the restrictive covenant provides that it binds “successors, heirs and assigns” of the landowner, then the restriction runs with the land.
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THE COVENANT MUST TOUCH AND CONCERN THE LAND. A restrictive covenant touches and concerns the land if the effect of the covenant is to make the land more useful or valuable to the benefited party. The land benefited by the restrictive covenant is known as the “dominant estate,” and the land burdened by the restrictive covenant is referred to as the “servient estate.” For a negative covenant, the covenant must restrict the holder of the servient estate in the use of that piece of land. For example, a restrictive covenant prohibiting use of a servient estate from selling tobacco or alcohol on the land is a covenant that touches and concerns the land.
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THERE MUST BE HORIZONTAL PRIVITY.At the time the parties entered into the agreement to restrict the property, there was horizontal privity if the two shared some interest in the land independent of the covenant (i.e. a grantor-grantee, landlord-tenant, or mortgagor-mortgagee relationship).
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THERE MUST BE VERTICAL PRIVITY OR PRIVITY OF ESTATE, TOO. Vertical privity, or privity of estate between the parties to a contract, means that a mutual or successive relationship exists to the same rights in property. When the property is conveyed to a third party, the vertical privity requirement will be satisfied
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NOTICE MUST HAVE BEEN GIVEN TO SUBSEQUENT PURCHASERS OF THE COVENANT. Generally, the restrictions must be recorded in the local government's land records. The recorded document must specify that the property is restricted in order to put a subsequent buyer of the land on notice that there are use restrictions which apply to the property.
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