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Do You Know How Protective Covenants Can Affect Your Home?

In addition to zoning, some properties have covenants recorded at the courthouse that “run with the

land.” These “protective covenants” can put a serious pinch in your plans for a piece of property.

Protective Covenants

A protective covenant remains in effect as the property is sold from owner to owner. The covenants are

designed to maintain a certain aspect of the area in question. The covenants may require a particular

architectural style or use for the land to mention only a few areas of restriction.

Land in a scenic area may have a protective covenant that prevents certain types of development for the

land or properties on it. Importantly, these restrictions may not show up in the zoning laws, so make

sure you research the issues before buying. Let’s consider an example of a great buy gone wrong

because of a protective covenant.

A protective covenant may restrict the number of parcels into which the property can be subdivided.

Thus, you could find yourself in a situation in which you buy a one hundred acre parcel with an eye

toward subdividing it. Upon researching the issues, you discover the zoning laws allow the parcel to be

cut into quarter acre lots. Visions of profit swirl before your eyes. Your development dreams, however,

could turn to nightmares if there is a protective covenant.

Assume you go ahead and purchase the parcel. While showing it to a friend, a neighbor from down the

road walks up and introduces himself. You excitedly explain you plans for subdividing only to be shocked

when he tells you there is a protective covenant that prevents the creation of any lots under ten acres.

What if the covenant restricts ANY subdividing of the parcels? That great deal you got on the parcel may

not look so hot when the protective covenant is factored in.

So, how should you deal with protective covenants? First, you should ask the seller whether any exists

for the property. Second, make sure you buy title insurance as the title company will certainly look for

any protective covenants before issuing a policy.

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http://www.closingcow.com

Call Us or Text Us 323-230-3502 Watch Our Video on YouTube click here

Our YouTube Channel www.youtube.com/watch?v=KVoSsqk_Pr0

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