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Restrictive Covenant: How It Affects Your Property

5-Minute Read
Published on October 22, 2022

Finding the right home means more than ensuring it has the features on your checklist. If you plan to move into a planned community, you should read the restrictive covenant document carefully to know what you can and cannot do in the community.

What felt like a dream home may not be as good as it sounds once you realize how much they restrict what you can do (CC&Rs).

So, what is a house covenant? Keep reading to learn more about a covenant controlled community and what it means.

What Is A Restrictive Covenant In Real Estate?

A restrictive covenant creates a deed-restricted community. The deed states what homeowners can and cannot do with their house or land. The deed is legally binding and can have penalties if the buyers don’t follow the obligations stated on the deed by the homeowner’s association.

When you sign a restrictive covenant agreement, you agree to abide by the rules regarding the real property. It might seem overbearing or restrict what you can and cannot do with your home, but it protects the area’s property values.

Types Of Restrictive Covenants

There are different types of restrictive covenants real estate. The most common pertains to the land, property alterations, and how you use the home.

Type Of Restrictive Covenant


Land And Property Use Restrictions

This restricts how homeowners can use their land and what they can do to it. Common examples include fence options, the type of animals on the land and the use of outbuildings, such as sheds.

Property Alterations And Aesthetics Restrictions

This defines how you can alter the property’s features and even colors. This may affect what you can and cannot do to a home’s exterior.

Property Maintenance

This covenant requires specific types of property maintenance or limits how long you can let something go, such as cutting the lawn, cleaning the gutters or repairing the roof. This protects the aesthetic appeal of the area.

Number of Tenants

This limits the number of people that can live inside a home, especially if you have non-family members living with you.

Property Use

This governs how you use the property. For example, some associations won’t allow homeowners to run a business from their homes, and if they do, they may limit the type of operation.

Everyday Examples Of A Restrictive Covenants

Each association has different restrictive covenants, but here are some of the most common restrictions in a condominium development or planned community.

  • Paint colors: Most associations control the color you can paint your house. This prevents neighbors from painting the house an obscene color that hurts property values.
  • Landscaping: Some covenants restrict the type, size or color of the landscaping homeowners can have.
  • Fencing: Some associations don’t allow fences and those that do restrict the type and height of the fence.
  • Home business: Some associations don’t allow you to run a business from your home, or if they do, they may restrict the type of business you can operate. There may also zoning issues you have to follow based on city ordinances.
  • Occupancy: The covenants may restrict how many people can live in your home. This is especially important if you use the home as your primary residence.

How Are Restrictive Covenants Enforced?

Depending on how badly someone violates the covenants, various consequences could exist. The HOA determines the covenants on the CC&R document provided to all homeowners when they purchase the home.

If property owners choose not to follow the homeowners association rules, they could face penalties or worse financial consequences. These include the following.

  • Warnings or fines: Most HOAs offer a warning with a deadline to fix the issue. If you don’t rectify the situation to fit within the restrictive covenants, most HOAs will fine you for not obeying the legal documentation.
  • Lawsuits: Most covenant violations don’t end up in a lawsuit. However, if property owners continually violate the rules or don’t fix an issue after being warned and fined several times, the HOA may not have a choice but to file a lawsuit.
  • File liens: If property owners don’t pay their HOA dues or fines assessed for violation of a restrictive covenant, the HOA can file a lien against the property. Before the property owner can receive funds from selling the home, they must pay off the lien.

Pros And Cons Of Restrictive Covenants

Restrictive covenants have pros and cons. They protect property owners but restrict them in ways many find frustrating.


  • Restrictive covenants ensure homeowners properly maintain their property to avoid neighborhood eyesores
  • The deed restrictions keep homeowners within certain limits, so you don’t have to worry about obnoxious features on a neighbor’s home
  • The restrictions can limit the number of people living in a property to avoid excessive noise, crowding and other situations a crowded home can create.


  • The restrictive covenants can be too restrictive, making it difficult to manage your own home.
  • You might have to get approval for any upgrades or changes you make to your home.
  • If you violate the restrictive covenant, you’ll likely pay a fine.

The Bottom Line

Restrictive covenants are good and bad. They keep a neighborhood looking its best, including proper maintenance and aesthetically pleasing features. However, they can be more restricting than many homeowners care to have.

If you plan to move into a planned community, read the fine print of the community’s requirements closely and when you’re ready to begin the home loan process, contact us to get started.

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Sam Hawrylack

Samantha is a full-time personal finance and real estate writer with 5 years of experience. She has a Bachelor of Science in Finance and an MBA from West Chester University of Pennsylvania. She writes for publications like Rocket Mortgage, Bigger Pockets, Quicken Loans, Angi, Well Kept Wallet, Crediful, Clever Girl Finance, AllCards, InvestingAnswers, and many more.