Deed restrictions limit how a property can be used. A deed is a legal document that defines who owns a particular property. When you buy a home, for example, your name is added to the deed signifying that you own it.
Homeowners associations (HOAs) can use deed restrictions to set certain standards for behavior and property use. Deed restrictions can also be used to preserve nature or wildlife areas.
Learn how to determine whether a property has deed restrictions, and how buying a deed-restricted property could lead to issues if you don't understand the limitations.
Definition and Example of Deed Restrictions
Deed restrictions are written rules and regulations that spell out what a piece of land or property can and can't be used for. In general, a deed restriction applies to the property itself, regardless of who owns it any given time.
Finding out whether a property has deed restrictions is as simple as searching public real estate records. Real property records of the county where the property is located will include any deed restrictions.
Deed restrictions can impose different types of restrictions, including:
- How the property is used (i.e. residential, commercial, etc.)
- The type of activities that can be carried out on the property
- What kind of structures can be built on the property
Deed restrictions can take the form of conditions, covenants, or restrictions (CC&Rs). These are rules that dictate how a piece of real estate can be used.
You’ll likely have deed restrictions if you own a home that's governed by a homeowner association (HOA). Violating a deed restriction established by your HOA could trigger penalties or fines.
For example, say you want to put up a fence to enclose your backyard. Deed restrictions may require you to construct a particular type of fencing, such as vinyl or wood paneling, and prohibit you from putting up chain link fencing.
How Deed Restrictions Work
Deed restrictions work by specifying rules of a property, namely which activities and uses are allowed and which are not. They essentially impose rules on specific property, and property owners must adhere to them.
So everyone who owns a home in a subdivision that has deed restrictions, for example, must follow them.
A deed restriction can remain attached to the property in perpetuity or expire within a specific time frame. HOAs can use deed restrictions to maintain property values. They can also be used to maintain the character of a particular property area.
For example, they can be used to prevent commercial or industrial activity from taking place in what's meant to be a residential area.
What you're restricted to depends on the limits or rules imposed by your homeowner association. For example, your HOA agreement might specify that you cannot:
- Park boats, boat trailers, or RVs in or around your home
- Plant hedges or ornamental trees within so many feet of your property line
- Build any type of wall or fencing near the sidelines of a golf course
- Construct outbuildings without HOA approval and within so many feet of your property line
- Build near an easement
- Change the exterior color of the home
- Run a business of any kind from your home
- Raise livestock, including poultry, pigs or cows, on your property
- Place placards or signs on your property without HOA approval
You may also be prevented from renting or leasing out any part of your home or property through a deed restriction.
For example, say you own a vacation home in a subdivision that's located in a popular tourist area. You'd like to rent it out during the year when you're not using it to earn some extra income. If the deed restrictions for your property expressly prohibit short-term rentals, you wouldn't be able to rent it to vacationers without violating your HOA agreement.
You may still need to obtain a permit to rent out your property in the short term, even if rentals are not banned by deed restrictions.
Special Considerations for Homebuyers
Buying a deed-restricted property could create problems if you're not aware of what is or isn't allowed before signing off on the paperwork. For example, you don't want to find out after you've spent $5,000 on a new fence that you were never allowed to put it up.
There are, however, a few things you can do to avoid situations like this when buying a home. The first step is researching the property you're interested in to determine whether there are any deed restrictions in place.
Again, this can be as easy as searching the property address in public real estate records through the register of deeds. You or your real estate agent can conduct the search. You can also ask the HOA whether there are any deed restrictions.
If you find that a property does have deed restrictions, the next step is learning exactly what they are and how long they'll remain in place. Depending on how they're worded a deed restriction might expire after 25 or 30 years.
If you're buying a home in an older subdivision, the restrictions may have expired. If you're looking at a newer subdivision, on the other hand, you may be stuck with them for decades.
You'll have to decide whether to move ahead with purchasing a deed-restricted property. Consider how comfortable you are with the exact restrictions, how interested you are in the property, and how long you plan to own it.
Depending on where you plan to buy, deed restrictions may be a non-negotiable part of the package. Before you commit to paying a mortgage, property taxes, homeowners insurance, and HOA fees or dues, consider what kind of trade-offs you might be required to make with a deed-restricted property.
- Deed restrictions are limitations on the way that a piece of property can be used.
- Deed restrictions apply to the property, regardless of who owns it.
- Homeowner associations can enforce deed restrictions to preserve property values.
- Some common deed restrictions include limits on the types of structures that can be built, the planting of hedges or ornamental shrubs, and the raising of livestock.
- Before buying a deed-restricted property, it's important to understand what the restrictions are and how they will affect you.