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Real Estate Newsletter

The Effects of Restrictive Covenants on Land Use

Zoning laws and ordinances are the chief method that local governments employ to regulate the use and development of property. Similar results can also be achieved by private persons or entities through the use of “restrictive covenants” sometimes called “covenants, conditions and restrictions” or “CC&R’s.”

Restrictive Covenants

A covenant is basically an agreement or promise. As it applies to property, it is usually an agreement between two or more parties to do or not do something related to the property. Historically, it often arose between two landowners of adjacent property and could be positive (an agreement to do something) or negative (an agreement not to do something). Generally, it was considered that a subsequent purchaser of property subject to a covenant could not be bound by a positive covenant, but would be bound by a negative covenant.

Eventually, use of restrictive covenants was extended to regulate the use and development of certain tracts of land as they were developed. It is theoretically possible for a number of adjacent landowners in one area to create a binding agreement about the use and development of such properties. More commonly, though, the owner (and developer) of a large tract of land that is to be subdivided and sold as parcels, (either before or after buildings have been constructed on it), will prepare a document memorializing “restrictive covenants” that will apply to each parcel.

Creation of Restrictive Covenants and Common Provisions

Restrictive covenants are common for residential developments. The restrictions can be placed into or attached to each deed or, more often, filed as a separate document with the local recorder of deeds. The restrictive covenants then become binding upon each purchaser and each successor purchaser to that property until the covenants are terminated. However, the covenants may theoretically be effective forever.

Restrictive covenants vary depending on how they are drafted, the location and nature of the property, and other factors, but common provisions include:

  • That property can only be used for residential purposes (often just single-family residences); commercial activities are usually not allowed.
  • Minimum lot sizes and that the property cannot be subdivided.
  • “Setbacks” – how far buildings must be from the street and lot lines.
  • Rules about animals – they may not be allowed at all, or may permit only domestic animals such as dogs and cats, subject to a specified number of pets and other restrictions.
  • The size, quality, color scheme, and type of building allowed – unlike zoning laws, which usually set a maximum size, restrictive covenants may set a minimum size (to maintain a uniformity in the houses) and may also provide for an architectural committee with the right of approval on building, landscaping, and decorating plans to ensure uniformity of quality and architecture.
  • A ban on aesthetically objectionable practices, such as parking old, unused vehicles on the property, failing to cut the grass, holiday decorations that remain up too long and placing signs on the property.
  • Restrictions on erecting of fences, walls, and outbuildings or installing a pool.

Constitutionality of Restrictive Covenants

Proponents of restrictive covenants argue that they can increase property values and improve the community. Critics point out that they infringe on the owner’s land-use rights and may be used to effectively keep out “undesirable” elements, or to discriminate against certain individuals.

If restrictive covenants are violated and the property owner cannot be convinced to voluntarily comply, a legal action to force compliance may be filed. Courts will generally enforce restrictive covenants, unless they determine such covenants are no longer necessary or advisable.

In the last century, restrictive covenants were often explicitly drafted to exclude racial minorities, especially African-Americans. In a landmark case in 1948, the U.S. Supreme Court considered whether such racially motivated covenants are enforceable. The Court declined to nullify the restrictive covenants, because they were private agreements, but it held that the courts could not enforce them. The Court determined that such enforcement would be government action and would violate the 14th Amendment to the Constitution. It is now considered that restrictive covenants cannot be used to discriminate on the basis of race, creed, color, national origin or ancestry.

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