Real estate developers generally purchase large parcels of land, which they then subdivide into individual lots for home construction. Most developers will build homes in a subdivision that are fairly similar in appearance, so as to convey an attractive incentive for would-be purchasers that they will be living in a community of fine homes. Developers have a vested interest in ensuring that the character of the neighborhood and the appearance of the subdivision remains attractive, at least until their construction project loans have been repaid and they have turned a profit.
To that end, developers will often file, generally at the same time that the land plat is being approved for subdivision and development, a declaration of covenants that will be applicable to all parcels of land (lots) sold within the development. Once the zoning authority approves of the development as presented, the covenants (conditions and restrictions) will become binding on any purchaser of land in the subdivision. In other words, these covenants generally “run with the land” (see below).
The important thing to remember is that the builder’s covenants are binding on all persons purchasing property within the builder’s subdivision. Such covenants are made “of record” in the county or city where the land is located, and will be referred to in any deed transferring land to a purchaser. Language in a deed most often refers to the conveyance of land “subject to any existing CC&Rs and easements of record” or similar wording.
Specific restrictions and covenants are generally not enumerated in the deed itself, but will be contained in a separate document referred to in the deed. It is important that a prospective purchaser inquire about and review any such separate documents containing these covenants prior to purchasing the land in question.