Introduction to Private Land Use Controls
In the realm of real estate and title insurance, ownership of land is rarely absolute. While government entities impose public restrictions like zoning and building codes, private entities also exert control through Covenants, Conditions, and Restrictions (CC&Rs). These are legally binding rules recorded against a property's title that dictate how the land can be used, what can be built upon it, and how the property must be maintained.
For title insurance professionals, CC&Rs represent a critical component of the title search. Because these restrictions are recorded in the public record, they provide constructive notice to all future owners. Understanding how these restrictions operate is essential for passing the exam and is covered extensively in our complete Title Insurance exam guide.
Covenants vs. Conditions vs. Restrictions
| Feature | Covenants | Conditions |
|---|---|---|
| Definition | A promise to do or not do something regarding the land. | A qualification of the estate granted. |
| Enforcement | Usually results in a lawsuit for damages or an injunction. | Can result in the 'reversion' or forfeiture of title. |
| Severity | Less severe; the owner keeps the property. | More severe; the owner may lose the property. |
| Title Impact | Encumbrance on title. | Creates a defeasible fee estate. |
The Legal Nature of CC&Rs
CC&Rs are typically found in a document called a Declaration of Restrictions. This document is recorded by a developer or homeowner's association (HOA) before any individual lots are sold. Because the restrictions are recorded before the transfer of individual deeds, they are said to 'run with the land.'
For a covenant to run with the land and bind future owners, several legal requirements must be met:
- Intent: The original parties must have intended for the restriction to bind future successors.
- Touch and Concern: The restriction must relate to the use, value, or enjoyment of the property itself, rather than being a personal contract between individuals.
- Privity of Estate: There must be a legal relationship between the parties (such as grantor and grantee) at the time the covenant was created.
- Notice: Subsequent purchasers must have notice of the restriction, which is usually achieved through recording in the public records.
Common Types of Restrictions
Title Insurance Considerations
When a title examiner performs a search, they look for CC&Rs in the chain of title. These are typically listed as exceptions in Schedule B of the title commitment and policy. This means the title insurance company is not providing coverage for losses arising from the existence of these recorded restrictions.
However, lenders often require specific protections regarding CC&Rs. The ALTA 9 Series of endorsements provides affirmative coverage against certain risks, such as:
- Violations of restrictions existing at the date of the policy.
- Future violations of restrictions that would result in the forfeiture or reversion of title.
- Encroachments of improvements onto easement areas or building setback lines.
If you are studying for your licensing exam, it is vital to practice identifying these nuances in practice Title Insurance questions.
Unenforceable Restrictions
Termination of Restrictions
CC&Rs do not necessarily last forever. They can be terminated or rendered unenforceable through several means:
- Expiration: Some declarations include a specific date when the restrictions will expire.
- Merger: If one person acquires all the lots in a subdivision, the restrictions may merge and disappear.
- Release: The parties benefited by the restriction (such as an HOA or neighbors) can sign a formal release.
- Abandonment: If the restrictions are consistently ignored by everyone in the community and the HOA fails to enforce them over a long period, a court may find them abandoned.
- Changed Conditions: If the character of the neighborhood has changed so drastically that the original purpose of the restriction can no longer be achieved, a court may terminate it.