By Christopher Sabala, Attorney:
Say you are a military veteran moving from California to Texas to enjoy your retirement. You are excited to purchase a home with your VA certificate. Among the qualities you are looking for in a new community is the ability to store your boat for those soon-to-be-frequent days on the lake.
The seller’s disclosure notice states your “dream home” is not controlled by a Homeowners Association (HOA). You move forward with the purchase confident that a nosey neighbor is not going to harass you about deed restrictions.
After a month of going about your business in your new home a neighbor approaches you one day. She says, “Hey, you can’t park a boat in your driveway in this neighborhood!”
Taken aback by both her statement and the brazenness of making it in your driveway, you examine the Covenants, Conditions, and Restrictions (CC&Rs) recorded in your chain of title. Imagine to your surprise in finding out that all homeowners in your subdivision are prohibited from parking or storing a boat, trailer, camper body, or similar vehicle in any driveway.
What does the veteran do then?
The above scenario is all too common. It could have been avoided with a little diligence prior to closing on your “dream home”.
The military veteran would have been best advised to examine his title insurance commitment. When a real estate purchase closes with a title company all buyers receive a title policy. In your title commitment/policy is a Schedule B which includes exceptions to the issued title policy. An exception is a matter that will not be covered in the title policy. Schedule B includes both standard exceptions and property specific exceptions.
Specific exceptions may include issues related to restrictive covenants, easements, mineral severances, leases, and building setback requirements. Restrictive covenants are often referred to as deed restrictions. Restrictive covenants are private or contractual covenants which burden or limit the use of land.
The main idea, typically, with restrictive covenants is to increase the value of the property. When a developer takes a large tract of land and subdivides the land into residential lots they want to maximize each lot’s value. One way to achieve this is by creating restrictive covenants obligating all future owners to abide by a uniform set of use standards. Many home buyers desire to live in a development where other owners are prohibited from using the residential lot as a storage space.
Some buyers find trailers, RVs, and boats to be unsightly when parked in a driveway for an extended period of time. Developers recognize that buying psychology. Therefore, they create restrictions prohibiting these items.
There are no real limitations to restrictive covenants except that they cannot run afoul of individuals’ constitutional rights or frustrate public policy. Some examples of unenforceable covenants are those that limit occupancy to certain races, or restrict certain religions from owing properties in a subdivision.
Below are the necessary elements of restrictive covenants which bind subsequent owners, transferees, and assigns:
- Must be in writing.
- Must be an intent to run with the land.
- The covenant must touch and concern the land.
- There must be horizontal privity.
- There must be vertical privity or privity of estate.
- Notice must have been given to subsequent purchasers of the covenant.
Pursuant to Texas Property Code Section 13.002 an instrument that is properly recorded in the county where the is property located is notice to all persons of the existence of the instrument and subject to inspection by the public.
Why does Texas have this statute in place? One important reason is to make every potential buyer of land in Texas aware of the fact that your “dream home” or “weekend getaway” may have restrictive covenants in the chain of title burdening a desired use of the land.
If you are concerned with potential restrictions or prohibitions of use on your land please call our firm to schedule a consultation to discuss your matter.