A covenant is a promise or provision contained in a property’s title deed. A restrictive real estate covenant is a clause in your title deed which limits the use of the property. The agreement also has attached consequences should you fail to comply with any of the restrictions.
Restrictive covenants have a significant impact on your property and should be well understood before they are signed. It is prudent to have a Denver real estate lawyer to go through the deed and advice you appropriately. Here are the typical restrictive property covenants.
Property Use Restrictions
Most real estate restrictive covenants limit the use of your property. When purchasing property, ensure you understand your limitations on the property use. The restriction should not affect how you want to use the property. In situations where your zoning ordinance is more limiting compared to your covenant, the law replaces your restrictive covenant.
These are limitations concerning modification or construction of your structures. They are set by architectural review committees established by a real estate developer. After the property is sold, the homeowners’ association board of directors controls the review committee. The restrictions range from exterior paint colors, landscaping, types of fences among others. All construction on your property must be reviewed and approved by the architectural review committee.
A real estate restrictive covenant might entirely prohibit leasing or have certain leasing limitations. Some covenants, for example, restrict the leasing of property for less than six months. This might be of little consequence if you are purchasing commercial property. If you are buying a vacation home on the beach, however, to lease weekly, it will substantially reduce your property’s worth.
In addition to restrictive covenants, real estate deeds have affirmative covenants. They obligate real estate owners to take a particular action. Payments of HOA fees are one of the affirmative covenants in property ownership. Make sure you understand the limitations of your property’s title deeds; ask your lawyer in Denver, Colorado to explain everything to you.