A restrictive covenant is a contract that outlines limitations on actions a person may take. When applied to real estate, restrictive covenants regulate how land may be used. The portions of a CC&R (covenants, conditions and restrictions) that limit your decorating, landscaping or other lifestyle options are a common type of restrictive covenant. But restrictive covenants are not limited to residential property; commercial property may also be subject to restrictions. Real estate restrictive covenants usually "run with the land," that is they are attached to the property and therefore remain binding on new owners after a sale. These contracts try to ensure property owners maintain certain standards, thus preserving or enhancing property values and giving a development a uniform appearance. Restrictive covenants on commercial properties may ensure that a business is not disruptive to other businesses or nearby residential areas.

Examples of restrictive covenants

Some things a restrictive covenant may cover include: - Size of residence allowed - The type of construction materials allowed, including those for your roof, chimney or addition - Colors allowed on the exterior of your house, including the trim - The type and height of fence you may put up - The type and size of outbuilding you may put up, as well as the materials you use to build it - Prohibitions on storing junk in your yard and how "junk" is defined - Types of structural modifications allowed - Landscaping standards, including types of bushes and grass height - Home office regulations, including prohibiting them - Restrictions on satellite dishes or antennas - Mailbox type and placement - Parking restrictions, including on driveway construction or placement, garages and parking spaces - Regulation of swimming pools - Types of business activities allowed on the property, such as operating a factory or farm - Restrictions on sale or rental of the property

Restrictive covenants are not all the same, so if you are considering buying property covered by one make sure you understand it. Also, be aware that property owners are bound by restrictive covenants even if they are not aware of them. It pays to ask before finalizing a purchase.