Real Estate Vocabulary: Restrictive Covenant

August 27, 2020

It is easy to sometimes get lost in the world of real estate terminology.  That’s why each week I blog to explain different terms and vocabulary that you should understand when buying or selling a home.

This week is focused on the term “restrictive covenant.”

Here is another relatively simple concept in real estate that is sometimes misunderstood.  Simply stated, a “restrictive covenant” is an agreement that requires a homeowner to either do or not do specific things.  These covenants are part of the agreement found on a specific home (as part of a specific neighborhood or subdivision) when you purchase it — so you should go into the deal knowing any requirements or limitations.

Yet, somehow, buyers are sometimes still surprised when they discover their area has restrictive covenants.  This “somehow” is often, and unfortunately, negligence on behalf of the real estate agents involved in the process.

It is important to note that even homes that do not have an HOA (home owners association) can still be subject to restrictive covenants. Lately, we have been finding a restrictive covenants for our buyers for which the listing agent has indicated none existed.  So, agents really do need to double and triple check, because if a neighborhood covenant is more restrictive than a city or county ordinance, the neighborhood covenant will have to be followed.  As a buyer, you need to make sure you convey things that are important to you, so your agent can confirm if they are allowable.

Restrictive covenants can include many aspects of homeownership, including (but certainly not limited to) what color you can paint your home, whether or not you can park your car on the street, if you can keep certain animals (say, chickens) on the property, whether the home can be used as a rental, or any additions that you might want to add.  Nearly anything can potentially be regulated by a covenant, and that’s why it is so important to know about them prior to your purchase.

If you have any questions or are having problems finding a restrictive covenant, don’t hesitate to get in touch.

  • Gary A. Miller
  • 919-428-7469

Gary A. Miller