Deed Restriction: Definition, How It Works, and Implications
- Lukas Müller, PhD
- 5 days ago
- 2 min read
A deed restriction, also known as a restrictive covenant, is a legal provision written into the deed of a property that limits how the property can be used. These restrictions are binding on current and future owners, and they “run with the land” meaning they remain in effect regardless of ownership changes.
Deed restrictions can be imposed by developers, homeowners associations (HOAs), or even government entities to protect property values, maintain community standards, or preserve certain land uses.
Common Types of Deed Restrictions
Deed restrictions can vary widely depending on the location and the purpose of the restriction. Some common examples include:
Limits on home size, design, or color
Restrictions on renting or using the home as a short-term rental
Prohibitions on commercial activity or running a business from home
Rules about fencing, landscaping, or parking
Restrictions on additional structures like sheds or guesthouses
While some restrictions are minor, others can significantly impact your ability to alter or use your property as you wish.
Deed Restrictions and HOAs
In many planned communities or subdivisions, homeowners associations (HOAs) use deed restrictions to uphold uniform standards across properties. These rules are designed to preserve the neighborhood’s appearance and property values but can feel restrictive to owners who prefer more autonomy. It’s important to understand that when you buy into an HOA-governed community, you’re also agreeing to follow its deed restrictions—even if you disagree with them.
Investment Implications
For real estate investors, deed restrictions can impact rental income potential, property modifications, or redevelopment plans. A restriction that limits rentals or prohibits multi-family conversions could make an otherwise great investment less attractive. Before purchasing investment property, it’s essential to investigate not only zoning laws but also any deed-level restrictions that could affect your intended use. Being proactive here can prevent legal complications and financial loss.
How Deed Restrictions Affect Homeowners
Deed restrictions are legally enforceable, and violating them can lead to legal action, fines, or even forced removal of unauthorized improvements. Before purchasing a property, it’s critical to review the deed and any attached covenants to understand the rules you're agreeing to.
For example, a buyer planning to build a detached garage or rent out their home on Airbnb might be surprised to learn those activities are prohibited under the property’s restrictions.
Can Deed Restrictions Be Removed?
Removing a deed restriction is difficult and often requires legal action or approval from the party that originally imposed the restriction such as a developer or HOA. Some restrictions have expiration dates, but many are permanent unless formally modified through a court order or mutual agreement.
Prospective buyers should always check for deed restrictions during the title search or due diligence period and consult with a real estate attorney if they have concerns.
Final Thoughts
Deed restrictions are an important but often overlooked aspect of property ownership. They shape how land can be used and may impact future plans for renovations, rentals, or resale. Whether you’re buying your first home or investing in real estate, understanding these legal boundaries can help you avoid costly surprises and ensure the property aligns with your goals. Always read the fine print—because what you don’t know can restrict you.
