Is Your Property Restricted? Understanding Restrictive Covenants in Real Estate

If you own property, it’s essential to be aware of any restrictive covenants that may dictate how oyou can use or develop the land. We typically view land ownership as absolute; however, your use of your own property may be restricted.

What are Restrictive Covenants?

Restrictive covenants are legal obligations written into the deed of a property that restrict the use or development of the land in some way. These covenants are used to maintain a certain standard within a community, preserve the character of a neighborhood, or protect the value of properties within it. Common examples include limitations on building heights, types of allowable structures, and even the colors you can paint your home.

Running with the Land

The concept of a covenant “running through the land” is crucial in real estate law. This means that the covenant is not merely an agreement between the original parties, but attaches to the property itself. As a result, it binds subsequent owners for the duration of the covenant’s term, regardless of whether they were the parties to the original agreement. When a property is sold, the new owner acquires it subject to these existing restrictions, making it imperative for potential buyers to conduct through due diligence.

Impact on Property Use and Sale

Restrictive covenants can significantly impact what you can and cannot do with your property. For instance, if there’s a covenant in place that restricts the construction of commercial buildings, you would be unable to develop a commercial enterprise on your land, even if it’s located in an otherwise prime location for business. Such restrictions can also affect property values and marketability. Properties with fewer restrictions are generally more appealing to a broader range of buyers, whereas those with stringent covenants may only attract a niche market.

Expiration and Enforcement in North Carolina

In North Carolina, there’s a noteworthy aspect of restrictive covenants to consider; most covenants automatically expire after 30 years unless they are specifically for residential purposes only. This statutory limitation is a safeguard against outdated or unreasonable restrictions binding properties in perpetuity. However, for covenants that limit the land to residential use, this expiration does not apply, meaning that such can continue indefinitely unless legally challenged or amended by agreement of the affected parties.

Navigating Restrictive Covenants

For property owners and prospective buyers in North Carolina and elsewhere, understanding the presence and implications of restrictive covenants is paramount. Before purchasing a property, it is advisable to obtain a full title search and review any covenants recorded against the property. If you currently own property and are considering development, a review of your deed and any associated documents is essential to ensure compliance with existing covenants.

In some cases, it may be possible to challenge or amend restrictive covenants, particularly if they no longer serve their original purpose or unduly restrict the use of the property. Legal challenges can be complex and require a thorough understanding of real estate law, making it advisable to consult with a legal professional specializing in this area.

In conclusion, restrictive covenants play a significant role in shaping the use and development of property. Whether you’re buying, selling, or developing land, being aware of these restrictions and their legal implications is crucial.

McIntyre Elder Law is offering free consultations to discuss your estate planning and elder law needs. Call us at 1-888-999-6600 or visit mcelderlaw.com/scheduling.

Brenton Begley, Chief Legal Officer
Estate Planning & Elder Law Attorney

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