Purchasing a Deed-Restricted House – MoneyTips

Just like laws vary by country and state, certain houses can be subject to specific rules that owners must abide by. Broadly speaking, a deed restriction is a limitation on what you can do with your property. Some common examples of deed restrictions include prohibiting the use of your home for conducting business activities or limiting the types of animals allowed on the premises.

If you’re house hunting and come across a deed-restricted house, you’ll want to know exactly what the restrictions are. We’re here to help you understand deed restrictions, how to find out if a home is in a deed-restricted community and everything else you might find helpful before purchasing a deed-restricted house.

A deed-restricted community is a housing development where all properties are subject to certain limitations. Typically, the development will have a homeowners association (HOA) to enforce these rules and restrictions.

The purpose of a development with deed restrictions is to ensure certain standards are maintained throughout the community and protect property values for homeowners.

Who Can Impose a Deed Restriction?

Deed restrictions are imposed by owners of property, like developers of deed-restricted houses in HOA communities. For example, in an HOA community, the builder or developer will usually create the HOA and attach a deed restriction to all homes in the development. Alternatively, any homeowner can impose deed restrictions on a property, provided they aren’t breaking any laws.

What Are Common Deed Restrictions?

In HOA communities, there are several common restrictions each homeowner agrees to when they buy their house. It’s important that every homeowner in a deed-restricted community understands what they can and can’t do, since breaking these rules can result in fines, or in some cases, losing your property.

Some common deed restrictions in these types of communities include:

  • Privacy fences: A deed-restricted community may limit the size and type of fence you’re allowed to install. For example, you might not be permitted to have a chain link fence or to have slats that exceed a certain width.
  • Types of structures: An HOA might also limit the types of structures you can have on your deed-restricted property. The community’s rules might limit the size of detached garages or prohibit having sheds in backyards or obstructing a neighbor’s view.
  • Business use: Many HOA communities have deed restrictions against using your home for business activities.
  • Paint colors: Believe it or not, some communities limit the paint colors you can use for your home’s exterior. It may not seem like a big deal, but if you want to repaint, be aware that you might have to choose from a small selection of pre-approved colors.

Remember, if you buy a home in a deed-restricted community, you may be limited in how you can use the property. But if you’re looking at a home, how can you know whether or not it’s in a deed-restricted community? Here are the ways to find out.

Ask your real estate agent

The easiest thing to do is ask your real estate agent if a house you’re interested in buying is in a deed-restricted community. Your real estate agent has access to a lot of information and should be familiar with how to research if a home is in a deed-restricted community. Simply call or text your agent and inquire about any deed restrictions the property might have.

One of the best ways to find out if a home is in a deed-restricted community is to have a title company conduct a property title search. The title search will give you all the information on a property’s history, including any liens or encumbrances that might apply.

Check with your local government

In some places, you might be able to find out if a home has deed restrictions by checking the property records. Try contacting the department of the local government responsible for recording deeds. In most cases, that will be the county clerk’s office or the recorder of deeds.

How Long Do Deed Restrictions Last?

A deed restriction is tied to the property itself, not its owner – and if there’s no expiration date, a deed restriction can continue indefinitely. Deed restrictions “run with the land,” which means they are attached to the land itself and not just the structure.

Even if the original home is destroyed and a new home is rebuilt in its place, the deed restriction will still be in force. Deed restrictions also outlive owners, meaning the new owner’s warranty deed will include the same restrictions after a sale.

Can You Change a Deed Restriction?

Changing a deed restriction will often come down to the decision of the HOA board, which exercises power over the covenants, conditions and restrictions (CC&Rs). An HOA’s CC&Rs contain all the rules and stipulations homeowners in the community have to comply with.

Fortunately, these rules can be changed but usually require a majority vote from homeowners. The requirements for changing CC&Rs can vary by the HOA and its bylaws. You’ll have to read the association’s documents to find out exactly what your community requires.

So how do you change a deed restriction? Let’s find out.

What Are The Steps to Changing a Deed Restriction?

Changing a deed restriction can be very difficult because you’re essentially asking to change a law. Though it’s certainly a challenge, getting around a deed restriction is possible by having a majority of the HOA board agree to sign off on changing it.[1]

If that doesn’t work, you can file a lawsuit and go to court, where you’ll ask to be released from the deed restriction. If a judge issues a judgment in your favor, the deed restriction will be lifted. Just remember that to do this, you’ll need to convince the judge that there’s a legal basis for why the restrictions should be changed.

Before committing to requesting changes to a deed restriction, make sure to conduct your due diligence on the community and its restrictions. If you decide you still want to try and change a deed restriction, here are some steps to help you through the process:

Step 1: Review the covenants

Before you do anything, take the time to read through the HOA’s covenants. The restrictive covenants of an HOA outline the responsibilities of the association’s members – what you can and cannot do under the rules of the HOA. Included in the covenants will be information on deed restrictions, as well as the HOA’s rules and penalties for violating them.

Step 2: Talk to your neighbors

In some cases, you may be able to step around a deed restriction by getting your neighbor to agree to whatever it is you want to do. For example, if you want to build a structure that blocks the neighbor’s view, but they give you the okay, you may be able to obtain a release from that restriction.

Another benefit of speaking to your neighbors is that they might be (or know someone) on the board of the HOA and can provide insights into the restriction and the process of contesting it.

Step 3: Speak with the HOA board

In a deed-restricted community, the HOA can have the power to impose or remove certain deed restrictions. If you want to challenge a restriction, you’re going to have to get the HOA board to sign off on it. You’ll have to speak with the members who oversee the HOA to see if they’re willing to grant you a release.

Step 4: Consult an attorney about filing a lawsuit to change

If the HOA board rejects your request, you can always consult an attorney about filing a lawsuit to try to change a deed restriction. However, this process will not be cheap and will likely take many months (or even years) to play out. Even then, there’s no guarantee you’ll emerge the victor.

Get the Rule Book Before Buying a Deed-Restricted Home

When it comes to a deed-restricted home, knowledge is power.

Before buying a deed-restricted home, get the rule book (aka the CC&Rs) and read up on what is and isn’t allowed. Make sure you fully understand what limitations exist on the property. While deed restrictions are often put in place to help maintain property values and a community feel, some people might find them frustrating and cumbersome.

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