Property owners agree to stringent covenants and conditions that restrict the use and enjoyment of their own property for two main reasons. First, and most importantly, homeowners want to maintain or enhance the property’s value. Second, homeowners want to use and enjoy their property without annoyance, distraction, or offensive use by their neighbors that falls short of being an actual violation of any existing law. Zoning ordinances are limited in what they can control; they cannot control what type of person moves into a neighborhood and/or how he will maintain his property. Although it is true that most counties and local governments do have laws protecting residents from unsafe or unhealthy conditions on neighboring property, there is little they can do to prevent clutter, poor appearance, or just “bad taste.” These indiscretions can cost a neighboring property thousands of dollars in appraised value, and can also impair home buyers’ interest in it, should the owners attempt to move away from the offending property.
Covenants regulate what property owners in a particular area can or cannot do with their property. When a geographically-restricted group of homeowners are bound by neighborhood covenants, individual homeowners are better insulated from the possibility that one errant homeowner will bring down the value of surrounding properties because of the appearance of his or her house. Covenants ostensibly ensure that a residential area will remain a desirable one to live in; that the properties contained therein will retain their value; and that, in return for some minor sacrifices, homeowners will be able to better enjoy their own properties. Zoning laws can change, leaving residents unprotected from the possibility that a strip club or deer-processing plant might move in.
Covenants can range in subject matter from the prohibition of flagpoles in the front yard to restrictions in outdoor music during certain hours. They may limit the colors a homeowner may paint a house or the type of shrubs and trees used to landscape around it. They may control pets, vehicle parking, security lights and alarms, mailboxes, or remote-control toys. While many people are accustomed to such restrictions when renting or leasing residential properties, they do not realize that such limitations also can be placed on properties they own. “It’s my property and I can do what I want with it” is a common retort that provides little defense for a home-owner who has breached a covenant attaching to his or her property.
In order for covenants to be binding, they must be legal. For example, in the early 1900s, racially restrictive covenants were used to exclude minorities from white neighborhoods. Since civil rights laws (prohibiting discrimination) did not come into being until many years later, state courts reviewed challenges to these covenants under the Due Process Clause and the Rule Against Restraints on Alienation. In some courts, neither of these grounds proved sufficient to strike down such racially restrictive covenants, and many continued for years (although restrictions on alienation of property are generally void). The practice was finally outlawed by the U.S. Supreme Court in Shelley v. Kraemer, 334 U.S.1 (1948). Other covenants that attempt to restrict otherwise legal rights can always be challenged, but, buyer beware, a homeowners’ association is a private one in which buyers voluntarily agree to the covenants.