Restrictions on the user of the land fall into two general classifications: private restrictions and public restrictions. Public restrictions refer strictly to zoning ordinances under a state's police power. Private restrictions are created by land developers rather than public agencies and usually constitute both a benefit and a burden to the land. To the extent that a landowner is restricted in the use that the landowner may make of the land, the restriction is considered to be a burden, but to the extent that the land owner has a right of enforcement against other landowners, it is considered a benefit. This section will only cover Covenants, Conditions and Restrictions.
Deeds or other instruments may impose restrictions on the use of property for any legitimate purpose. The right to acquire and possess property includes the right to dispose of all or any part of, and to impose upon the grant whatever reservations or restrictions the grantor may see fit, provided that they are not contrary to prohibitions prescribed by law.
Private restrictions are classified generally as covenants and conditions. The distinction between these two terms is based primarily upon the right of enforcement in the event of a breach. Historically, restrictive provisions in deeds, if they did not fall into the category of conditions, were called covenants, i.e., a promise or agreement to do or not to do certain things; the grantor could enforce the covenant only by suing for damages if the covenant was violated. Commencing about a hundred years ago, the courts began to enforce restrictive provisions in another way; this is, by enjoining or forbidding their violation. Injunction is now the customary method of enforcing restrictions.
NOTE: The term restriction is employed today as a general classification, embracing both covenants, where the enforcement may be by way of injunction or damages, and conditions where the right of enforcement may additionally result in a loss of title.
See also Texas Bulletin TX2013006 – LEGISLATIVE UPDATES 2013 Part I relating to the right of a residential homeowner to use an adjacent lot for certain residential purposes.
See also Texas Bulletin TX2015004 – LEGISLATIVE UPDATE 2015 Relating to Unenforceable Restrictive Covenants Regarding Standby Electric Generators Affecting Residential Homes
A covenant is a promise or an assurance to do or not to do a certain thing.
A covenant running with the land is a real covenant as distinguished from a personal covenant. A real covenant must run with the land, touch and concern the land, and involve privity of estate between the party seeking to enforce the covenant and the one to be bound.
A restrictive covenant is one which restricts or regulates the use of real property or the kind, character, and location of the buildings or other structures that may be executed thereon. Upon violation of a restrictive covenant, the remedy is an action for damages or injunctive relief.
Note: The issue of touch and concern was a major factor in the regulation of private transfer fees. See Section 3.76.11.
A condition is a restriction that is coupled with a reverter clause. This clause, also known as reversionary clause, provides that in the event of violation of the restrictions, the ownership of the land will revert to the grantor in the deed.
Any Deeds of Trust or other interests in the land established after the creation of the condition will be extinguished if the condition is enforced.
Breach of a condition does not automatically effect a reversion of title. In that respect, a judicial determination is necessary.
Conditions are not favored in law because they tend to destroy estates. Therefore, a provision in a deed imposing obligations or restrictions on the grantee will be construed as a covenant, rather than as a condition subsequent, when it can be reasonably done.
Restrictions or conditions may be created or established by:
- Deed, lease, or mortgage.
- Instrument of dedication.
- Agreement between two or more landowners.
- Declaration of restrictions executed by the owner of the land.
- General plan of development or improvement for a tract.
- Plat or map of a subdivision, condominium, townhouse, etc.
Shown by the plat or map.
Contained in the dedication of the plat.
- Private Transfer Fee Agreements
- The instrument sets a definite period of duration.
- Many Private Transfer Fee Agreements provide for a term of 99 years.
See however Bulletin TX2011005: For properties to which PTFs have been attached prior to January 1, 2012, a notice of existence of the PTF must be filed on or before January 1, 2012 or the PTF is void as to the properties covered by the fee. The person claiming a PTF must also re-file the notice described by this section not earlier than the 30th day before the third anniversary of the original filing date described by Subsection (a) and within a similar 30-day period every third year thereafter.
- Many Private Transfer Fee Agreements provide for a term of 99 years.
- The instrument sets a definite period of initial duration with a proviso for subsequent renewal(s).
- The instrument does not set a definite period of duration. If the period of duration is not specified, restrictions are presumed to continue for the whole duration of the estate created.
- It is not necessary that properly created restrictions be named as covenants running with the land. They will run with the land even if the phrase is not recited.
- The rule against perpetuities is not applicable to covenants, conditions, and restrictions.
- The rule forbidding restraints on alienation is generally not applicable either.
- Courts have established some grounds on which certain restrictions can be successfully attacked. Some of these are as follows:
- termination after a specified period of time.
- change of conditions in character of subdivision
- condemnation action
Restrictive covenants and conditions are generally held valid where reasonable, not contrary to public policy or to law, and not in restraint of trade or for the purposes of creating a monopoly.
Restrictions which benefits no one, or seriously interfere with the proper development of the community, or prohibit the use of property have been held to be void.
Racial restrictions are void under the Constitutions of the United States and the state of Texas.
See also Texas Bulletin TX2013006 – LEGISLATIVE UPDATES 2013 Part I relating to drought-resistant landscaping or water-conserving natural turf.
Restrictive covenants and conditions based on race, color, religion, sex, or national origin are considered by the Company to be unenforceable and void regardless of whether they are coupled with a reversionary or forfeiture provision, and they must not be referred to in any commitment or title policy describing the land which they purport to affect.
If a covenant of this nature is contained as one of a series of restrictive covenants in an instrument, and it is necessary to except that instrument because of some other restrictive covenants it contains, the exception must be worded as follows:
Covenants and restrictions, but omitting any such covenant or restriction based on race, color, religion, sex, or national origin, contained in instrument recorded in Book __________, page ______.
If it becomes necessary to supply, in conjunction with a commitment, title report, or policy, a copy of an instrument that imposes a restrictive covenant or condition based on race, color, religion, sex, or national origin, the copy should be prepared in such a manner that the covenant based on race, color, religion, sex, or national origin would be capable of being omitted in one of the following forms:
- By leaving a blank where the racial covenant appears and inserting in lieu
thereof the following phrase:
"..............this covenant omitted........."
- By crossing out the racial covenant.
- By stamping, typing or printing across the racial covenant or in the margin
beside it the following:
"...........this covenant omitted..........."
The United States Court of Appeals, in Mayers v. Ridley, 465 F.2d 630 (D.C. Cir. 1972), has held that the Fair Housing Act of 1968, 42 U.S.C.A. Section 3604 forbids a recorder or register of Deeds from accepting for recordation, any instrument containing a racially restrictive covenant based on race, color, religion, sex, or national origin.
Accordingly, do not accept for recording purposes any document which contains racial restrictions.
Termination And Extinguishment
Termination and extinguishment is one of the most frequently litigated areas of covenant law. The most common litigated matters are:
- Expiration of the duration by express termination dates within covenants.
- Statutes limiting the duration of covenants.
- Merger of the title or ownership.
- Release or agreement by all beneficiaries.
- Change of conditions or other circumstances that cause the courts to deny
enforcement of the restrictions on the grounds that the enforcement would
be inequitable or oppressive.
- In some cases, lands acquired for public uses are released from private
restrictions at least during the time the property is in public ownership.
- Foreclosure of prior Deeds of Trust, liens, or taxes.
- In some states, tax foreclosures.
- Condemnations could potentially eliminate restrictive covenants if the taking is total.
Before you decide to insure over restrictions, you need prior approval from a Texas Stewart Underwriter.
Release Of Covenants, Conditions, or Restrictions
The release of any covenants, conditions, or restrictions requires special care and consideration.
Any release, generally in the form of a quitclaim deed, must be executed by the former grantor, and if deceased by his heirs or devisees; if a legal entity, and no longer in existence, by its assigns, successors, or legal representatives.
Covenants and Restrictions
Any attempt to release needs to take into consideration whether:
- The time or period of the release is a permissible time or period as provided
by the instrument that established the restrictions. In the event that the
instrument did not established any, the above statement may be ignored.
- The necessity of obtaining proper releases from all the necessary parties
who are affected or benefited by the restrictions. In order to determine all
necessary parties, an examination must be made as to all the related land
owned by the grantor at the time of the establishment of the restrictions.
All the owners and encumbrancers must also join in the execution of the release.
- The instrument that established the restrictions makes provision in regard to the necessary number of owners that must execute the release. If the instrument is omissive in this regard, the totality of owners and their spouses and encumbrancers must be required.
Restrictive Covenants Exception
When restrictive covenants are found of record, the restrictive covenant exception may be deleted only if:
- the restrictive covenants have expired by their terms;
- if, in the opinion of counsel, the restrictive covenants are:
- void and unenforceable by statute,
- have been effectively released;
Before deleting the exception based on any of the above, check with a Texas Underwriter.