Restrictive Covenants: Check Before You Have To Write A Check

Almost all subdivisions, at least those started in this millennium have restrictive covenants attached to the real estate.  Restrictive Covenants can dictate what color your house can be or what kind of flowers can be planted around your mailbox and can even dictate the breed of dog prohibited from living in the subdivision.  It is important to know the restrictions that apply, ideally prior to signing the offer to purchase, but realistically prior to the expiration of your due diligence period.  

If you are considering placing an offer on property, request a copy of the restrictive covenants from the real estate agent or seller before you make the offer so you can review them and make sure you are able to live by (or with) the restrictions.  If there is a homeowner’s association (HOA), ask for the contact information so you can verify all of the restrictive covenants that apply.  Several subdivisions have amendments that have been recorded so you want to make sure you have the latest or all of the relevant covenants.  If you are having trouble getting your hands on the covenants or question the meaning of a covenant, contact your closing attorney.  If there are restrictions on the property, they will be recorded at the Register of Deeds office and the closing attorney can tell you if they apply to the property you are purchasing.

Reviewing the covenants prior to the due diligence period expiring because it may reveal limitations that could be a concern for you or your family and you may be able to terminate the contract without too much harm.  Do you want to be at the closing table getting ready to move in and find out your best friend of 10 years cannot move in with you because he is a pit bull and the breed is specifically band by the covenants.  Finding out at the closing table is not only stressful but if you decide not to proceed, you may be held in breach of contract and responsible for damages to the seller.  At a minimum you will lose the due diligence money and probably any earnest money deposited.  By reviewing the restrictive covenants at the beginning of the contract process, you may save yourself from pain and heartache as well as keep money in your pocket for the house that is meant to be your home.