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Deed Restrictions on the Real Estate License Exam

You will need to know the types of deed restrictions for the Real Estate License Exam. A deed restriction is a limitation on the use of your property that appears in the deed to your property and is put there by another person. In fact, it’s specifically called a private land-use restriction.

A deed restriction is considered a private agreement, because no one forces you to buy the particular property governed by it and if you do buy it, you voluntarily agree to abide by the restrictions. Deed restrictions also are referred to as covenants, conditions, and restriction (CCRs), or sometimes restrictive covenants.

What is it you can’t do?

A deed restriction limits what you can do with your property. For instance, a deed restriction may limit you to building a house in only a certain architectural style or not allow you to build a house of less than a certain size.

Deed restrictions can limit almost anything you may want to do with your property. The only limit on the restriction is that it can’t be something illegal. For example, a restriction that says you can’t sell the property to a member of a particular ethnic or religious group is illegal and therefore invalid because it violates fair housing laws.

Deed restrictions bind not only the first person who buys the property after the restriction is put into effect but also all future owners, unless the restriction has a time limit.

Sometimes a deed restriction and public law cover the same issue but have different degrees of limitation. In that case, the more restrictive or limiting of the two applies. Local zoning may require a minimum of one acre for each house you want to build.

But say that the actual size of the property you’re buying is three acres, and the developer of the subdivision has put a deed restriction in place that says individual properties may not be sub-divided again. Even though the government, through the zoning ordinance, says you ought to be able to get three separate pieces of property out of your three-acre parcel, the deed restriction won’t permit it.

The deed restriction wins, because it’s more limiting. Although not always the case, deed restrictions are often more limiting than local laws because they may be designed to do what local laws normally do not; for example, restrict the color you can paint your house.

Who says you can’t do it?

Anyone can put a deed restriction on his property that binds all future owners. Typically, though, deed restrictions are placed on a group of individual properties that have been created as a result of a subdivision. The restrictions are placed in the deed by the person creating the subdivision as each property is sold.

The term restrictive covenants is used to mean a set of restrictions that applies to an entire subdivision, which is a large piece of real estate that’s been divided into smaller properties to be built on and sold individually. Restrictive covenants cover all the properties in the subdivision.

Every property owner has the right to seek enforcement of a deed restriction through the courts. So if you paint your house purple, when a restrictive covenant prohibits using that color, any of your neighbors can seek an injunction to force you to paint your house another unrestricted color.

However, if your neighbors ignore your new paint job for a certain length of time, they may lose the right to take you to court. The law of the state in which the property is located governs the time frame after which you can lose the right to seek enforcement of a deed restriction. The loss of a right that results from not using it is called laches.

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