For over 100 years, city and county authorities, neighborhood developers and homeowners have created and amended various methods of designing and maintaining communities in an effort to protect and improve property values. Regulating the size of homes, the homes’ location on a lot, the subdivision of lots, and the types of improvements to a property are ways in which limits on renovations to properties actually benefit the whole community.
Some ways in which communities seeks to preserve a common scheme of development are set out below. While the below list is not an exhaustive list of matters to investigate, these potential limitations to renovations are a matter of public record and can and should be reviewed before entering into a purchase contract.
Whether you bought a Fixer Upper that you plan to transform into your dream home or you are planning to flip for profit, do not become an episode of Renovation Realities and have to stop in the middle of your project. Check these five things first.
- Check to see if there are Restrictive Covenants, and if so read them.
Covenants, Conditions, and Restrictions (also called "CC&Rs" or “Restrictive Covenants”) are rules used to regulate the use and appearance of property. They can govern the use of single property or all properties in a neighborhood. These rules are legally binding and are the source of many lawsuits. The CC&R’s, among other regulations, can have building set-back lines which state how close to the property lines the home and any appurtenances thereto can be constructed. Setback lines are critical considerations in any renovation project, whether adding a detached garage or pool house, a breakfast nook, an extra bedroom or you are working on a complete reconstruction, building setback lines must be observed. In many cases, a planned renovation may benefit the aesthetics and/or the property values of a neighborhood. In such instances, the governing body which enforces the Restrictive Covenants (usually all of the adjoining property owners or the Home Owner’s Association) may grant a variance to the building set-back lines. A variance is official permission to violate the existing requirements of the Restrictive Covenant. Since such variances, or “Amended Restrictions,” are difficult to obtain, they should always be in writing and should always be recorded.
- Check with the Architectural Control Committee if one is setout in the Restrictive Covenants.
If your property has an Architectural Control Committees (ACC) it will usually be established in the Covenants. The ACC provides an extra level of scrutiny to any proposed renovation submitted to the neighborhood governing body. One objective of the ACC is to maintain the character of the neighborhood. It is important to note that while a proposed renovation project may meet the building-set back line requirements established by the CC&R’s, aspects of the proposed project may not meet additional stylistic controls set by the ACC. ACC approval is necessary before any exterior improvements (including changing the paint color) are made to a property subject to the ACC. Fortunately, such approval can usually be coordinated during an extended contract due diligence period.
- Check zoning to make sure the property can be used as you plan.
Zoning ordinances are regulations enacted or set in place by governmental authorities. Zoning ordinances specify how property in certain areas or zones can be used and improved. Among other things, property zoning can determine minimum lot size, maximum home size and building setback lines. Should a proposed residential improvement project run afoul of the existing zoning ordinance, the municipal governing authority may grant a zoning variance, which allows the project to proceed, but it is not guaranteed that they will. While the process to obtain such a variance usually is a lengthy process, it can be easy to forecast whether or not a residential renovation project will be approved. In most municipalities, government administrators have simple, objective requirements to determine whether or not a variance can be issued.
- Check Recorded Plat Maps
In creating neighborhoods, most developers will draft and record a plat map, which defines the community and its boundaries. Among other things, the plat map sets out the design of streets, common area for use by the neighborhood, sidewalks, drainage easements, lot dimensions, and building set-back lines. The recorded plat map may set out additional restrictions which affect the use of a particular lot. As the plat map, like the CC&R’s and zoning ordinances described above, can restrict the buildable area of the property, the plat map should be reviewed prior to purchasing a property where a renovation project is immanent. Obtaining permission to initiate a project where the building set-back lines on a recorded plat map may be violated requires approval much like that described in the section above discussing CC&R variances.
- Check to make sure you are not in a Historical District
Local governments have the power to create Historic Districts. The purpose of Historic Districts is to preserve property which is of great historic, architectural or cultural significance to a larger community. Though obtaining permission to renovate property in a designated Historic District is possible and sometimes welcome by community leaders, the process for review and approval is cumbersome and time consuming. Not only does the approval process include the examination of the architectural plans for a possible location of an additional room or outbuilding, but the approval committee may also take into consideration the building materials used in the project. The requirements for compliance with any approval to renovate or improve properties within a Historic District can drastically affect the original project plans. Additionally, since designated Historic District protections supersede other zoning regulations, the importance of knowing whether or not a property is located in a Historic District cannot be understated.
The abbreviated list above is meant to draw attention to the very different and independent methods in which residential renovations are managed by government authorities, property developers and home owners. Further, most of the matters highlighted above are not reviewed by a closing attorney in a typical residential purchase transaction unless the attorney has been specifically retained to do so. A purchaser who intends to renovate a property shortly after acquisition would be well advised to investigate the above matters before executing a purchase contract.
Published by John F. Renger on August 23, 2016