Technically (and within the context of residential neighborhoods), a covenant is a rule governing the use of real property. However, in common usage, it may also refer to a promise or agreement (as formalized in a deed) concerning the use of the land, as where a purchaser of land “covenants” to abide by certain restrictions associated with the use of the land. Essentially, such covenants are promises made by a prospective purchaser as a condition of purchasing the land in question.
When properly recorded on a deed conveying land, a covenant (”restrictive deed covenant”) has the legal effect of a binding contract term, and may be so enforced. When covenants are instead signed privately among neighbors, as in a mutual compact or agreement, they are still binding upon the signatories and may be litigated if breached.
Most planned developments (subdivisions of homes built by a particular builder), including closed or gated residential areas, as well as condominium associations and housing cooperatives, make use of covenants for the benefit of all residential owners and their neighbors. Neighborhoods with properly drafted and enforced covenants or architectural standards have been shown to retain property value better than those with poorly enforced covenants or no standards at all. Neighborhoods that follow their covenants and standards tend to be safer, look better, maintain better relationships with local governments, and better retain or increase the investments that homeowners have made in their properties.
Covenants differ from zoning ordinances in that they are between private parties rather than between a governmental entity and a private party. Thus, a neighborhood association or single homeowner may enforce a covenant as against another homeowner, rather than a city or county enforcing a zoning ordi-nance as against a private citizen. Another difference is that zoning ordinances are regulations recorded as local laws “on the books,” whereas covenants are recorded in private deeds, either as deed restrictions or as neighborhood compacts between private parties. Because covenants are voluntary, they may be more restrictive that zoning ordinances.