Restrictive Covenant

A restrictive covenant is a recorded promise that limits how land may be used, built on, or occupied, and it binds not only the original parties but every future owner of the burdened parcel. It runs with the land, enforceable by and against successors who never signed the original agreement.

How a Restrictive Covenant Works

A restrictive covenant is enforceable against future owners only when it runs with the land, a doctrine that requires the promise to be in writing, to intend to bind successors, to touch and concern the land, to satisfy privity of estate, and to give notice to later purchasers. Miss one element and the burden may not transfer.

The Legal Information Institute at Cornell Law School defines a covenant that runs with the land as one that binds successors in interest, not merely the original contracting parties. The pivotal element is "touch and concern." A covenant touches and concerns the land when its effect is to make the land more useful or valuable to the benefited party, per the covenants-running-with-the-land analysis published by Jackson Walker L.L.P. A promise to maintain a shared drive touches the land; a personal promise to settle a one-time debt usually does not.

Restrictive covenants take two forms. A negative covenant forbids an action, such as building above a height limit or running a barred business. An affirmative covenant requires an action, such as maintaining landscaping or paying association dues. Enforcement runs to the parties the covenant benefits: an adjacent owner, every lot owner in a subdivision, or an association acting for them. The usual remedies are an injunction to stop the violation or money damages.

Why a Restrictive Covenant Matters

A restrictive covenant matters because it survives the closing table and constrains what a new owner can do, whether or not that owner knew about it. A recorded covenant gives constructive notice to every later buyer, so an operator who skips the title record inherits a limit that can block a planned use, expansion, or renovation.

The underwriting discipline is to read every recorded covenant before pricing the deal, not after. A covenant that caps a parcel to single-story retail can make the highest and best use assumed in a model illegal. Restrictive covenants surface in the title commitment and in the recorded declaration of covenants, conditions, and restrictions, which Attorneys' Title Guaranty Fund describes as private agreements that govern land use and bind successive owners. Priced during due diligence, a covenant is an input. Discovered after closing, it is a stranded cost with no recourse.

Example

A restrictive covenant shows its cost when it blocks the density a buyer underwrote. Consider a 20,000 square foot parcel that zoning would allow to rise 70 feet, five stories at 14 feet each. A recorded covenant caps the building at 35 feet, or two stories, to protect a neighbor's sightline.

The covenant removes 60 percent of the buildable area the zoning allowed. The categories below show what different covenants block.

Variations and Edge Cases

A restrictive covenant is void when it discriminates. The Fair Housing Act of 1968 explicitly voided racially restrictive covenants, and the U.S. Supreme Court had already made them judicially unenforceable in Shelley v. Kraemer (1948). A discriminatory covenant that still appears in an old chain of title has no legal force, and several states now let owners record a form to strike the offending language.

Valid covenants can also end. A restrictive covenant terminates by a stated expiration date written into the declaration, by a written release from the benefited parties, by merger when one owner acquires both the benefited and burdened parcels, by abandonment through widespread violation, or by a court ruling that changed conditions have defeated the covenant's original purpose.

Restrictive Covenant vs Deed Restriction

A restrictive covenant is often confused with a deed restriction, and the two overlap. A restrictive covenant is a promise about land use that can bind a group of owners mutually, usually through a recorded declaration such as subdivision CC&Rs. A deed restriction is a limit written into a specific deed by the grantor, binding that parcel's owners.

The practical difference is scope and source. A deed restriction is placed by the seller in the conveyance and burdens the conveyed parcel. A restrictive covenant is often mutual, binding many parcels for the benefit of each other. Courts treat both as land-use limits that run with the land when the elements are met, which is why title review looks for each.

Frequently Asked Questions

What does it mean for a restrictive covenant to run with the land? It means the covenant binds future owners, not just the person who signed it. Per Cornell's Legal Information Institute, a covenant that runs with the land binds successors in interest, so a buyer takes title subject to the restriction whether or not they agreed to it.

Are restrictive covenants legally enforceable? Yes, when they are in writing, intend to bind successors, touch and concern the land, satisfy privity, and give recorded notice. Courts enforce valid covenants by injunction or damages. Discriminatory covenants are the exception: the Fair Housing Act of 1968 voided them.

How is a restrictive covenant removed? A restrictive covenant ends by a stated expiration date, a written release from the benefited owners, merger of the benefited and burdened parcels, abandonment through widespread violation, or a court ruling that conditions have changed enough to defeat the covenant's purpose.

Related Terms

• CC&Rs

• Easement

• Title Insurance

• Reciprocal Easement Agreement

• Use Clause