Restrictive Covenant in Real Estate

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Restrictive Covenant in Real Estate

A restrictive covenant is a de-facto contractual arrangement which limits the owner of the land to what they can do with their property. These are intended to enhance property values by controlling development and creating uniformity. These covenants are attached to a property title and registered at BC Land Titles office. Restrictive covenants are enforceable in addition to municipal zoning bylaws and city restrictions.

For someone who is buying a home to demolish and construct again or are buying a lot, it is imperative that the charges, covenants, and easements registered on the property are investigated before you decide to purchase it, as it may restrict future plans for building.

Restrictive Covenants run with Land

A restrictive covenant runs with the land. It is an obligation which must be honoured by the owner of the land and it does not extinguish with change of ownership, unless the person or the authority which has registered the Restrictive Covenant gives the consent to remove the Restrictive Covenant. A person who purchases a lot with a restrictive covenant on title is bound to honour the building limitations of this restriction.

Any new purchaser must be made aware of the Restrictive Covenant by the Agent representing the purchaser. A notary or a lawyer processing the purchase for the buyer must make it a point to make the buyer aware of the restrictions imposed by the covenant. This will enable the buyer to conform to the laid down restrictions and make an informed decision. The title search on a property will show whether you have a restrictive covenant registered on the property. A real estate agent must obtain a title search and educate the client before an offer is made on the property.

Example of a Restrictive Covenant

Restricting building height, maximum height of trees to protect views of nearby neighbours and restrictions of planting of trees in particular cardinal direction are some of the examples of restrictive covenant. Developers use Restrictive Covenant to maintain uniformity as part of the building scheme to ensure consistency in the type or colour of roof, fencing material, or siding material.

Implication of Non-Compliance

If a homeowner is not compliant with the restrictive covenant and disregards the restrictions, any person who lives in the community or affected by the restrictive covenant is entitled to go to the court to enforce it. It could be your neighbour, or it could be the person who registered the covenant enforcing the restriction. The courts have consistently ruled to enforce the restrictive covenant unless there has been a major change in public policy and environment. The court will order for the forced removal of the non-complying structure.

Buying a home with a restrictive covenant

If the intended use of the property is in conformity with the restrictive covenant one can safely buy a property with Restrictive Covenant.

If you have no intention of re-building your home, then restrictive covenants confer an advantage, since cosmetically all of the homes in the community are consistent and uniform and are bound to stay that way due to the Restrictive Covenant.

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