Real Estate - Restrictive Covenants

Provisions in a deed to a particular parcel of property may limit your use of property or the type and placement of structures upon it. "Restrictive covenants" are a prominent aspect of residential subdivisions and condominium developments, where a developer or community seeks to limit the development's growth or ensure the uniformity of appearance by regulating the development's aesthetic attributes.

A restrictive covenant may address features of a development that can be objectively regulated (for example, minimum lot setback lines or the prohibition of specific structures such as swimming pools or satellite dishes). Other features of a development can be the focus of more subjective restrictions, such as residential color schemes, architectural styles, or a broad prohibition on "conducting business" on residential property.

Several legal means may be employed to enforce a restrictive covenant. An aggrieved party may seek a court declaration that a particular use is prohibited or may sue to enjoin the property use that violates the covenant. Although damages are recoverable for breach of a restrictive covenant, a person is not required to show injury, because a mere breach of the covenant is sufficient grounds to stop the offending conduct or use.

Restrictive covenants are a contractual device and courts will interpret such covenants by applying the law of contracts. A restrictive covenant that is reasonable, clear, definite, and not contrary to public policy is generally enforceable. A court will resolve any ambiguity in a restrictive covenant in favor of the free and unrestricted use of the land and against the restriction. For that reason, subjective restrictions that cannot be narrowly interpreted because of inherent ambiguities are more difficult to enforce. Restrictive covenants that take a more literal and objective form stand a greater chance of passing muster.

In a recent Illinois case, a couple signed a contract to purchase a home in a subdivision. Prior to the closing, a title search revealed a defective title--the location of the home violated a restrictive covenant requiring a 10-foot setback from the property line. The court found that the buyers were justified in refusing to close the purchase of the property because of the defective title and the possibility that they would become defendants in a lawsuit to enforce the covenant.

When considering the purchase of a property in a subdivision, you should carefully examine all documents related to the property to identify restrictive covenants. Those documents include the deed, the title records, the plat, any separate declarations filed with the plat, and the general subdivision development plan, if it is available. Only careful examination of a property's title trail will reveal restrictions on how you can use your property.

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