What Should you Know Before Purchasing a Home with Deed Restrictions?

Deed restrictions, also known as restrictive covenants, are legal agreements that dictate how a property can be used or what specific conditions or limitations apply to the property. Before purchasing a home with deed restrictions, it's crucial to understand the implications and consider several factors to make an informed decision. Here's what you should know:

Key Considerations:

1. Nature of Deed Restrictions:

• Definition: Deed restrictions outline specific limitations on how the property can be used. This can include architectural guidelines, usage restrictions, or aesthetic requirements.

• Review Document: Obtain and thoroughly review the deed restrictions associated with the property. This document is typically recorded with the local county or municipal government.

2. Types of Deed Restrictions:

• Architectural Restrictions: Some deed restrictions focus on the design and appearance of structures on the property.

• Land Usage Restrictions: Restrictions may dictate how the land can be used, such as prohibiting certain commercial activities.

• Aesthetic Guidelines: Deed restrictions may include guidelines for landscaping, fencing, or exterior colors.

3. Homeowners Association (HOA) Involvement:

• Existence of HOA: Deed restrictions are often associated with the presence of a homeowners association (HOA). Determine whether the property is part of an HOA and understand its rules and regulations.

• Membership Obligations: If part of an HOA, be aware of membership obligations, including dues, assessments, and participation in community decisions.

4. Impact on Property Use:

• Evaluate Restrictions: Assess how the deed restrictions may impact your intended use of the property. For example, if you plan to run a home-based business, ensure that restrictions permit such activities.

• Future Modifications: Consider whether the restrictions allow for future modifications or additions to the property.

5. Enforcement Mechanisms:

• Enforcement Authority: Understand who has the authority to enforce deed restrictions. This is often the homeowners association or a designated entity.

• Consequences of Non-Compliance: Be aware of the consequences of non-compliance with deed restrictions, which may include fines, legal action, or other penalties.

6. Public Records Search:

• Research Public Records: Conduct a thorough public records search to uncover any recorded deed restrictions. This can be done through the local county recorder's office.

• Consult Legal Professionals: Seek advice from legal professionals, such as real estate attorneys, to ensure a comprehensive understanding of the restrictions.

7. Resale Implications:

• Impact on Resale Value: Consider the potential impact of deed restrictions on the resale value of the property. Some buyers may be deterred by extensive or restrictive covenants.

• Disclosures to Potential Buyers: If you decide to sell the property, you may need to disclose the deed restrictions to potential buyers.

8. Community Atmosphere:

• Community Harmony: Deed restrictions are often in place to maintain a certain standard and harmony within a community. Consider whether these restrictions align with your preferences and lifestyle.

Conclusion

Purchasing a home with deed restrictions requires careful consideration of the limitations and regulations associated with the property. Thoroughly review the deed restrictions, understand the involvement of homeowners associations, and assess how the restrictions may impact your intended use of the property. Consulting with legal professionals and conducting due diligence will empower you to make an informed decision and ensure a positive homeownership experience within the parameters defined by the deed restrictions.