Neighborhood Covenants
| Author | Jeffrey Wilson |
| Pages | 1223-1229 |
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Technically (and within the context of residential neighborhoods), a covenant is a rule governing the use of real property. However, in common usage, it may also refer to a promise or agreement (as formalized in a deed) concerning the use of the land, as where a purchaser of land "covenants" to abide by certain restrictions associated with the use of the land. Essentially, such covenants are promises made by a prospective purchaser as a condition of purchasing the land in question.
When properly recorded on a deed conveying land, a covenant ("restrictive deed covenant") has the legal effect of a binding contract term, and may be so enforced. When covenants are instead signed privately among neighbors, as in a mutual compact or agreement, they are still binding upon the signatories and may be litigated if breached.
Most planned developments (subdivisions of homes built by a particular builder), including closed or gated residential areas, as well as condominium associations and housing cooperatives, make use of covenants for the benefit of all residential owners and their neighbors. Neighborhoods with properly drafted and enforced covenants or architectural standards have been shown to retain property value better than those with poorly enforced covenants or no standards at all. Neighborhoods that follow their covenants and standards tend to be safer, look better, maintain better relationships with local governments, and better retain or increase the investments that homeowners have made in their properties.
Covenants differ from zoning ordinances in that they are between private parties rather than between a governmental entity and a private party. Thus, a neighborhood association or single homeowner may enforce a covenant as against another homeowner, rather than a city or county enforcing a zoning ordi-
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nance as against a private citizen. Another difference is that zoning ordinances are regulations recorded as local laws "on the books," whereas covenants are recorded in private deeds, either as deed restrictions or as neighborhood compacts between private parties. Because covenants are voluntary, they may be more restrictive that zoning ordinances.
Property owners agree to stringent covenants and conditions that restrict the use and enjoyment of their own property for two main reasons. First, and most importantly, homeowners want to maintain or enhance the property's value. Second, homeowners want to use and enjoy their property without annoyance, distraction, or offensive use by their neighbors that falls short of being an actual violation of any existing law. Zoning ordinances are limited in what they can control; they cannot control what type of person moves into a neighborhood and/or how he will maintain his property. Although it is true that most counties and local governments do have laws protecting residents from unsafe or unhealthy conditions on neighboring property, there is little they can do to prevent clutter, poor appearance, or just "bad taste." These indiscretions can cost a neighboring property thousands of dollars in appraised value, and can also impair home buyers' interest in it, should the owners attempt to move away from the offending property.
Covenants regulate what property owners in a particular area can or cannot do with their property. When a geographically-restricted group of homeowners are bound by neighborhood covenants, individual homeowners are better insulated from the possibility that one errant homeowner will bring down the value of surrounding properties because of the appearance of his or her house. Covenants ostensibly ensure that a residential area will remain a desirable one to live in; that the properties contained therein will retain their value; and that, in return for some minor sacrifices, homeowners will be able to better enjoy their own properties. Zoning laws can change, leaving residents unprotected from the possibility that a strip club or deer-processing plant might move in.
Covenants can range in subject matter from the prohibition of flagpoles in the front yard to restrictions in outdoor music during certain hours. They may limit the colors a homeowner may paint a house or the type of shrubs and trees used to landscape around it. They may control pets, vehicle parking, security lights and alarms, mailboxes, or remote-control toys. While many people are accustomed to such restrictions when renting or leasing residential properties, they do not realize that such limitations also can be placed on properties they own. "It's my property and I can do what I want with it" is a common retort that provides little defense for a home-owner who has breached a covenant attaching to his or her property.
In order for covenants to be binding, they must be legal. For example, in the early 1900s, racially restrictive covenants were used to exclude minorities from white neighborhoods. Since civil rights laws (prohibiting discrimination) did not come into being until many years later, state courts reviewed challenges to these covenants under the Due Process Clause and the Rule Against Restraints on Alienation. In some courts, neither of these grounds proved sufficient to strike down such racially restrictive covenants, and many continued for years (although restrictions on alienation of property are generally void). The practice was finally outlawed by the U.S. Supreme Court in Shelley v. Kraemer, 334 U.S.1 (1948). Other covenants that attempt to restrict otherwise legal rights can always be challenged, but, buyer beware, a homeowners' association is a private one in which buyers voluntarily agree to the covenants.
Covenants are often lumped together under the collective term of "covenants, conditions, and restrictions" or CC&Rs, a term commonly found in real estate documents. Since most covenants involve some kind of condition or restriction placed upon the buyer, the collective term "CC&Rs" has been more widely used in recent years to indicate the existence or future existence of limitations associated with the use of the...
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