Restrictive Covenants



Restrictive covenants are documents registered against the title of a property that put some sort of limitation on the use of that property. This can include how the property can be developed such as height restrictions, setback requirements or colors/materials allowed when building a home. Restrictive covenants stick with the property no matter how many times it changes hands. When a buyer takes possession of a property with a restrictive covenant, they are required to abide to the restriction in place.Consequences or a homeowner not abiding to a restrictive covenant would include legal costs and incurring costs of removing or changing any violating structures and returning it to the state it was in before breaching the contract. For example, a neighborhood requires all homes to have Cedar Shake Roofing and a homeowner replaces the roof with asphalt shingles. The homeowner would be responsible to destroying the roof and redoing it in Cedar Shakes to conform with the restrictive covenant causing a lot of frustration and a lot of time and money spent.Restrictive covenants can cover restrictions on the future use of a property and can impose limitations on secondary suites, whether the homeowner can operate a business from home or if you can cut down any trees on the property. Before entering into a firm agreement to purchase a property, due diligence is required to ensure that the property and the intended use of the home are not in conflict. It is recommended that buyers review restrictive covenants on title prior to placing an offer on a property. If time is not on your side in a hot real estate market, then placing a buyer condition subject to a buyer’s lawyer’s review and satisfaction of the title and registrations against it. Review title before writing an offer on a property to avoid disappointments and to be forewarned about any red flags.