Protective Covenants - Home Buyer Beware
By Raynor James, Fri Dec 9th
In addition to zoning, some properties have covenants recordedat the courthouse that "run with the land." These "protectivecovenants" can put a serious pinch in your plans for a piece ofproperty.
Protective Covenants
A protective covenant remains in effect as the property is soldfrom owner to owner. The covenants are designed to maintain acertain aspect of the area in question. The covenants mayrequire a particular architectural style or use for the land
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tomention only a few areas of restriction.
Land in a scenic area may have a protective covenant thatprevents certain types of development for the land or propertieson it. Importantly, these restrictions may not show up in thezoning laws, so make sure you research the issues before buying.Let's consider an example of a great buy gone wrong because of aprotective covenant.
A protective covenant may restrict the number of parcels intowhich the property can be subdivided. Thus, you could findyourself in a situation in which you buy a one hundred acreparcel with an eye toward subdividing it. Upon researching theissues, you discover the zoning laws allow the parcel to be cutinto quarter acre lots. Visions of profit swirl before youreyes. Your development dreams, however, could turn to nightmaresif there is a protective covenant.
Assume you go ahead and purchase the parcel. While showing it toa friend, a neighbor from down the road walks up and introduceshimself. You excitedly explain you plans for subdividing only tobe shocked when he tells you there is a protective covenant thatprevents the creation of any lots under ten acres. What if thecovenant restricts ANY subdividing of the parcels? That greatdeal you got on the parcel may not look so hot when theprotective covenant is factored in.
So, how should you deal with protective covenants? First, youshould ask the seller whether any exists for the property.Second, make sure you buy title insurance as the title companywill certainly look for any protective covenants before issuinga policy.
About the author:Raynor James is with http://www.fsboamerica.org - providing FSBOhomes For Sale By Owner. Visit our "sell my home" page athttp://www.fsboamerica.org/seller.cfm to list and sell your homefor free for one month. Visithttp://www.fsboamerica.org/buyer.cfm to see homes for sale byowner.
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