Purchasing a property is stressful at the best of times so imagine your surprise when you find out find out that your property is subject to restrictive covenants imposed by a previous owner or developers. Nowadays many properties are subject to these restrictions confusing buyers who expect to buy the land or buildings outright.

What is a covenant?

In property law, the term real covenant is used for conditions tied to the use of land. A “covenant running with the land”, also imposes duties or restrictions upon the use of that land regardless of the owner (Wikipedia). In our terms… there are limitations placed on the property to what you can and can’t do with it.

Covenants can also be ongoing. For example the restriction could state that land should be used for one house only, so if developing the land is your intention this would be in breach of the covenant restriction. When buying a house or land it’s imperative to check the title deeds before singing any contracts and really get your head around the restrictive covenants or other deed restrictions that are in place for the property you want to buy.

What’s its purpose?

There are a few of reasons for this. Many owners (and developers in particular) like to “control” how the land is used even after it is sold so that the remainder of the land in the subdivision retains its value. By restricting what can be built, where it can be built and from what materials it may be built, the developer is able to effectively regulate the standard and quality of building, thus preserving the value of any remaining lots. Some owners like to see this sort of regulation in place as it enhances and protects their asset and ensuring that nothing undesirable is built in the neighbourhood.

What you might find in a covenant

Restrictive covenants nearly always stipulate the minimum size residence allowed, how many homes may be built on one lot and what type of construction the homes must (or must not) be.

More restrictive covenants:

Set backs (how far homes must be from streets and interior lot lines).

Easements (such as a pathway for power lines or roads).

Fees for road maintenance or amenities.

Rules regarding changing or voiding the covenants.

Rules about pets and other animals (for instance: no breeding for profit, no livestock, no unchained pets).

Regulations dealing with in-home businesses and home rentals.

Rules that limit tree-cutting.

Clauses that dictate what type of fencing can be used, or that forbid all types of fencing.

Clauses to reduce clutter on lots, such as prohibiting owners from storing a vehicle that doesn’t run within view of others, or parking a recreational vehicle on the property.

Buyers sometimes agree the covenants can be good and restrictions give a development a more standard appearance and control some of the activities that take place within its boundaries. When enforced and everyone agrees, covenants are a good way of protecting your asset.