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.
Raynor James is with http://www.fsboamerica.org - providing homes for sale
by owner, "FSBO", properties. Are you thinking, "Should I sell my home?"
Visit http://www.fsboamerica.org/seller.cfm to sell your home sale for free
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