Restrictive Covenants

Restrictive covenants are contractual limits imposed on the use or occupancy of real property. Because they have the potential to substantially limit the use and development of property, buyers should carefully investigate any applicable restrictions before committing to purchase land. Restrictions may appear in deeds, leases, plats, or standalone documents called “declarations”. If you get title insurance when you buy property, the title company should note any applicable restrictions on Schedule B of the title commitment.

To create a restrictive covenant that is binding upon subsequent owners and assignees of the land in Texas, the following elements for a restrictive covenant must be met:

  • It must be in writing.
  • There must be an intent to run with the land.
  • The covenant must touch and concern the land.
  • There must be horizontal privity and vertical privity or privity of estate.
  • Notice must have been given to subsequent purchasers of the covenant.

Municipalities, developers, or homeowners’ associations (HOAs) will often create and enforce restrictive covenants. Private citizens may also regulate land use when they enter into contracts, which impose restrictive covenants on land. The goals of these entities vary, but generally, they’re trying to either increase property or to maintain order within the neighborhood. Restrictive covenants may also be designed to maintain the character of certain developments or neighborhoods.

Typical residential restrictions limit allowable uses of the property such as prohibiting commercial activities in a residential community or limit such items such as the color of point one can use or limit architectural styles.

Restrictions that are against public policy are not enforceable. Further, restrictions may become unenforceable over time due to waiver or abandonment. Waiver requires an intentional act. Abandonment means that the restrictions have been disregarded to such a degree that as a practical matter it is no longer possible for a court to provide the benefits that the restrictions originally intended. In court, minor violations and violations that do not materially affect the complaining party’s own property will not impair the enforceability of the restrictions. However, widespread or long-standing violations may make enforcement problematic.

The usual remedy for violations of restrictive covenants is an injunction from a court commanding the violator to comply with the applicable provisions. The party who successfully sues to enforce the restrictions may also be entitled to recover attorney’s fees and court costs, as well as civil damages of up to $200 per day for each day the violation continues.

Buyers are often not particularly concerned about restrictions, apparently thinking they are “standard” and focusing instead on property condition or other issues. However, as with any contract you should carefully read any applicable restrictions before binding yourself to the transaction. You may find they are not at all “standard”. In addition, restrictions may contain specialized terms or legal jargon, so it may be prudent to obtain the advice of an experienced real estate lawyer to ensure that you fully understand the legal effect. If you need assistance with a real estate purchase, lease, construction, negotiation or any other transaction, we provide a practical approach to addressing day-to-day real estate legal issues.