Restrictive covenant

For more information on restrictive covenant, visit Britannica.com.

A covenant or deed restriction that limits the property rights of the owner.

A Covenant or Deed Restriction that limits the property rights of the owner. See Conditions, Covenants and Restrictions, Deed Restrictions.
Example: A restrictive covenant was placed on property to prevent the sale of alcoholic beverages on the land for the next 50 years.

Common clause found in a contract for the sale of a dental practice. The seller contracts that he or she will not practice dentistry within a certain time and area. A junior partner may be asked to sign such a covenant to guarantee that he or she will not compete with the partnership for a period after leaving the partnership. Also used in an employment situation.

In urban centers restrictive covenants, which first became popular in the late nineteenth century, created segregated neighborhoods. Such covenants took the form of contracts between home owners prohibiting the sale of real estate to nonwhites and often to Jews and other ethnic groups. Because these covenants were private agreements, there appeared to be no direct state action in creating segregated neighborhoods and thus no violation of the Fourteenth Amendment. Such covenants were especially common in the North, where segregation was often illegal. For example, both Michigan and Illinois prohibited segregation, but in Detroit and Chicago, restrictive covenants created neighborhoods segregated by race and ethnicity.

The United States Supreme Court inhibited the use of restrictive covenants in Shelley v. Kraemer (1948). The Court conceded that the covenants themselves constituted private action and therefore did not violate the Fourteenth Amendment. However, because state courts enforced the covenants, the Court found unconstitutional state action.

In Jones v. Alfred H. Mayer, Co. (1968), the Court agreed that the 1866 Civil Rights Act prohibited “all discrimination against Negroes in the sale or rental of property—discrimination by private owners as well as discrimination by public authorities.” The Court found that the Enforcement Clause (section 2) of the Thirteenth Amendment empowered Congress to prohibit housing discrimination by private individuals.

.

See also Housing Discrimination; Race and Racism; Segregation, De Jure

— Paul Finkelman

An agreement between two or more individuals, incorporated within a deed which stipulates how land may be used. The constraints may include: the specific use to which a property can be put, the location and dimensions of fences, the setback of buildings from the street, the size of yards, the type of architecture, the cost of the house, etc. Racial and religious restrictions on inhabitants are legally unenforceable.

A provision in a deed limiting the use of the property and prohibiting certain uses. A clause in contracts of partnership and employment prohibiting a contracting party from engaging in similar employment for a specified period of time within a certain geographical area.

A covenant is a type of contractual arrangement. A restrictive covenant is a clause in a deed or lease to real property that limits what the owner of the land or lease can do with the property. Restrictive covenants allow surrounding property owners, who have similar covenants in their deeds, to enforce the terms of the covenants in a court of law. They are intended to enhance property values by controlling development.

Land developers typically use restrictive covenants when they subdivide property for residential developments. A land developer, after platting the subdivision into lots, blocks, and streets, will impose certain limitations on the use of the lots in the development. These may include a provision restricting construction to single-family dwellings with no detached outbuildings, as well as specifying that the dwellings are to be built at least a specified distance from the street and from the side and back lot lines, commonly called a "set back" requirement. Another common restrictive covenant specifies a minimum square footage for dwellings. There may be a variety of other restrictive covenants that seek to control the way the development looks and is maintained. These covenants are filed with the approved plat.

A person who purchases a lot in a development with restrictive covenants must honor the limitations. When the purchaser resells the lot to a buyer, the new owner will take the property subject to the restrictive covenants, because the covenants are said to "run with the land."

If a person violates or attempts to violate one or more of the covenants, a person who is benefited by the covenants, usually an adjacent property owner, may sue to enforce the restrictions. Courts generally strictly construe restrictive covenants to allow a landowner to use her land for any purpose that is not specifically prohibited by the restrictive covenants or by the local government. Therefore, if a developer wants to restrict a subdivision to single-family residences, the developer must state "single family residential" rather than "residential" in the covenant.

Restrictive covenants at one time were used to prevent minorities from moving into residential neighborhoods. A group of homeowners would agree not to sell or rent their homes to African Americans, Jews, and other minorities by including this restriction in their real estate deeds. Until 1948 it was thought that this form of private discrimination was legal because the state was not involved. However, in Shelley v. Kraemer, 334 U.S. 1, 68 S. Ct. 836, 92 L. Ed. 1161 (1948), the U.S. Supreme Court held such covenants to be unenforceable in state courts because any such enforcement would amount to state action in contravention of the Fourteenth Amendment to the U.S. Constitution. For a state court to enforce such an agreement would foster a perception that the state approved of racially restrictive covenants. Although this kind of restrictive covenant is no longer judicially enforceable, racial restrictions are still contained in some deeds.

Apart from real estate law, restrictive covenants may be used in partnership agreements or employment contracts to protect a business if a partner or employee leaves. For example, a life insurance company may require a prospective employee to sign an employment contract in which the employee agrees not to sell life insurance in that geographical area for a specified period of time after leaving the company. If the time and geographical restrictions are reasonable, a court may enforce the restrictions. Some restrictive covenants may be so unfair, however, that a court will declare them contrary to public policy and make them legally unenforceable.

See: Employment Law; Land-Use Control; Running with the Land; Zoning.

This article includes a list of references or external links, but its sources remain unclear because it has insufficient inline citations. Please help to improve this article by introducing more precise citations where appropriate. (October 2008)

This article is about contractual covenants that restrict use of real property. For contractual restrictions on employment, see Non-compete clause.

A real covenant is a legal obligation imposed in a deed by the seller upon the buyer of real estate to do or not to do something. Such restrictions frequently "run with the land" and are enforceable on subsequent buyers of the property. In jurisdictions that use the Torrens system of land registration, restrictive covenants are generally registered against title.

Contents 1 Scope of covenants 2 Commercial covenants 3 Residential covenants 3.1 Controversy 3.2 Housing segregation 4 See also 5 References

Scope of covenants

Restrictive covenants may arise from many sources, and may be registered against titles or included in leases. Some covenants exist for safety purposes, such as a covenant forbidding the construction of tall buildings in the vicinity of an airport or one restricting the height of fences on corner lots (so as not to interfere with drivers' sight lines). Covenants may restrict everything from the height and size of buildings to the materials used in construction to superficial matters such as paint colour and holiday decorations.

Commercial covenants

Restrictive covenants are commonly registered against commercial properties. General covenants such as those restricting the heights of structures or forbidding certain "dirty" businesses (such as feedlots or chemical production facilities) are common in industrial areas located near residential communities. Developers may seek to restrict the type of business allowed to operate in a certain area so that a purchaser of land in a research park, for example, could not turn the building into a bingo parlour or a tool and die factory. A commercial lease may include a restrictive covenant forbidding the sale of certain items, such as pornography or liquor. A powerful mall tenant (such as a major supermarket chain or other Anchor store) may require its landlord to include in its leases to other tenants a restrictive covenant forbidding the sale of certain items (such as fresh meat and produce). The latter situation is more common outside the United States, and is especially seen in Canada.

Residential covenants

Residential covenants are relatively common in the United States. Some residential covenants may be considered generally benign, such as those preventing owners or tenants from removing healthy trees, fundamentally altering historically important structures, or directly harming property values. Others, however, are more detailed. Some restrictive covenants may govern what colour a home's exterior is painted, what and how many exterior decorations are allowed, where cars are allowed to be parked, or even who lives in the house (outside of the owner's nuclear family).

Many communities also attempt to forbid amateur radio or outdoor television antennas. Various states in the United States have enacted or are enacting laws forbidding such restrictive covenants and rendering void existing covenants, as amateur radio operators are often seen as essential emergency services.^[1]

Controversy

Some have accused homeowners associations of selective enforcement of these rules, making a case only when it is something (or someone) another person dislikes. Breaking a rule, even unintentionally, can bring fines or even a lien on the home. In extreme cases, a homeowners' association may file a lawsuit against an owner who violates the covenants or even foreclose the property.

Attempts have been made to have federal agencies preempt certain restrictive covenants. For example, the American Radio Relay League attempted unsuccessfully to have the FCC pre-empt restrictive covenants related to amateur radio towers. The FCC found that restrictive covenants are private contractual agreements, not state or local regulation, and not subject to the FCC pre-emption policy.^[2]

A restrictive covenant differs in the United States from a zoning regulation in that its creation and enforcement is a matter of contract between the landowners whose properties are affected by it, rather than an exercise of the governmental police power. In Canada, governmental authorities may apply both restrictive covenants and zoning regulations to properties. For instance, the city of Calgary's requirement that buildings in the general vicinity of Calgary International Airport be under a certain height is registered against virtually every title in the northeast quadrant of the city as a restrictive covenant, not as a zoning by-law.

Housing segregation

In many cases before the 1960s, these covenants were used for segregationist purposes.^[3] A covenant might promise that only members of a certain race would occupy the property. In the case of Shelley v. Kraemer, the United States Supreme Court ruled that it would be unconstitutional for the courts to enforce racially restrictive covenants, and such covenants no longer have any force.

See also

• Timeline of Racial Tension in Omaha, Nebraska
• Covenant

References

1. ^ State Statutes Incorporating 'PRB-1 like' Legislation, American Radio Relay League (Accessed 9 January 2008)
2. ^ Modification and Clarification of Policies and Procedures Governing Siting and Maintenance of Amateur Radio Antennas and Support Structures, and Amendment of Section 97.15 of the Commission’s Rules Governing the Amateur Radio Service, Memorandum Opinion and Order, 17 FCC Rcd 333 (2001), aff'g Order on Reconsideration, 15 FCC Rcd 22151 (WTB 2000), aff'g Order, 14 FCC Rcd 19413 (WTB 1999), recon. dismissed, 17 FCC Rcd 19408 (WTB PSPWD 2002) ("PRB-1 2001")
3. ^ The Origins and Diffusion of Racial Restrictive Covenants Michael Jones-Correa Political Science Quarterly, Vol. 115, No. 4 (Winter, 2000-2001), pp. 541-568

This entry is from Wikipedia, the leading user-contributed encyclopedia. It may not have been reviewed by professional editors (see full disclaimer)