Pay attention and take a few minutes before you agree to purchase a home. Why? Because it is important to understand the “goal posts” or “boundaries” of the deed restriction as they not only dictate how you can and cannot use the property but also determine the integrity of the respective neighborhood.

In the current market economies, deed restrictions can be your best friend or your worst nightmare.  Deed restrictions spell out, in most cases, the MINIMUM standards that the developer sets when he/she develops a piece of land. 

• Examples: minimum square footage requirements, brick on one side or all around, the parking of utility vehicles like RVs/boats on or near the property, etc. 
• Some restrictions can be very specific, such as roof pitch, mailbox types, and the governance for maintaining common areas. 

The topic of deed restrictions has become popular because land positions held by builders are being given up due to current economic situations. New builders are acquiring the rights of these vacated lots to build at pennies on the dollar.  What does this mean exactly?

Let’s say that an existing stock of homes are 2800 to 3000 square feet each with brick all around. A new builder, buying the remaining land position, is required only to build to the restrictions, not to the standards, that the early builder set forth. That builder could come in and build 1800 to 2000 square-foot homes with little or no brick – because he/she can.  As a consequence, the value of the existing neighborhood may be drastically affected. 

There are many many reasons to have a great Realtor^® by your side to assist you in understandings deed restrictions, whether they are or are not being enforced currently by the homeowner associations/developer,  and the potential ramifications. Once recorded, deed restrictions cannot be changed without the signatures of all parties affected.  For that reason, they need to be taken very seriously.