What Are Deed Restrictions and Why Should I Care?

Traveling through a suburban Virginia neighborhood some years back, I noticed a sign at the entrance of the community. The sign indicated I was entering a restricted deed neighborhood. Not knowing what that meant, I went and did some research. I was surprised by what I discovered.

Do you know what deed restrictions are? And if so, do you understand why you should care? Deed restrictions can easily put the kibosh on a homeowner’s plans. Worse yet, it is not hard to end up with a piece of property to which deed restrictions are attached, only to not find out about those restrictions until after the purchase.

Legal Restrictions on Property Use

Let’s say you intend to buy a home in the Salt Lake City area. You contact the local realtors at CityHome Collective. Your agent shows you a number of older homes until you find one you love. But then you discover that particular home comes with deed restrictions. What does that mean for you, practically speaking?

Deed restrictions are legal restrictions on how you can use the property. Perhaps when the original home was built, some 50 years ago, the neighborhood’s developer decided that lot sizes were not big enough to accommodate anything larger than two-car garages. You are thinking of buying the home and extending the garage to accommodate a third car. Guess what? You will not be able to do so without getting the deed legally modified.

There really are few limits to deed restrictions. They can limit everything from the number of bedrooms in a home to whether or not more than two cars can be parked in the driveway. And yes, the restrictions are legally enforceable. The only way to remove any such restrictions is through legal proceedings.

Different from HOA Rules

Do not confuse deed restrictions with homeowner’s association (HOA) rules. They are not the same. Deed restrictions are legal restrictions placed on a property via the deed. Rules made by the neighborhood HOA are just that. They can be made, modified, and even canceled at the will of the HOA.

Also note that not all deed-restricted communities are HOA communities. While that is often times the case, deed restrictions can exist even where there is no HOA. In fact, there can be deed restrictions on a single parcel of land that do not apply to any other parcels in the same neighborhood.

Another thing to consider is that some deed restrictions have expiration dates. The neighborhood mentioned at the start of this article is a case in point. Though the restricted deed sign still exists, none of the properties in the neighborhood are still subject to restrictions. They expired years ago.

Run a Thorough Title Search

CityHome Collective says the best way to avoid deed restriction surprises is to run a thorough title search before purchasing a property. Moreover, buyers sometimes have to insist that title companies go above and beyond. Cursory searches may not turn up restrictions more than 50 or 60 years old.

According to the National Association of Realtors, some title companies avoid including deed restrictions in the reports due to misunderstandings relating to enforcement. These include restrictions implemented before the Supreme Court ruled against restrictions imposed based on religious or racial requirements in 1948.

At any rate, some deed restrictions from days gone by are legally unenforceable. Others are not enforceable because the enforcing body no longer exists. Neither case should prevent you from purchasing a piece of property you want. Where enforceable restrictions are still in place, it is important to consider their implications.