Private Methods for Regulating Land Use

Instructor: Shawn Grimsley
Governments are not the only ones that restrict how owners use real estate. In this lesson, you'll learn how private parties, such as homeowner's associations, lenders and sellers, impose limitations on what owners can do with their real estate.

Overview of Restrictions

Marty just bought a new house in an upscale gated community that includes a golf course, tennis courts, swimming pools, playgrounds and a fitness center for its residents. While Marty must ensure his property complies with local zoning laws, building codes and federal and state environmental regulations, his use of property is also heavily regulated by voluntary private restrictions. Let's take a look at some common ways private parties can restrict the use of real estate.

Defeasible Fees

Marty actually wanted to build his dream home on a nice piece of wooded land his dad owned located in the country. Unfortunately for Marty, his dad found religion and decided to deed the property to his church. Hope does spring eternal for Marty, however, because his dad deeded a defeasible fee, which means his dad conditioned the church's ownership of the prime real estate. The church only gets to keep the property as long as it's being used for religious retreats. Should the church stop using it for such a purpose, the property reverts back to dad, and Marty will have another crack at getting the dirt.

Restrictive Covenants & Equitable Servitudes

When Marty bought his current home in the gated community, he received a deed from the developer of the community that contained restrictive covenants. A covenant is simply a fancy word for promise, and a restrictive covenant is a promise that restricts how a property owner, like Marty, can use his real estate. The restrictive covenants in his deed restrict the color of his house, require him to maintain his lawn, and prohibit him from storing vehicles in his driveway, among other things. The community's homeowner's association enforces the covenants through monitoring, assessment of fines and even lawsuits to enforce compliance.

Sometimes property owners, like Marty, are restricted by equitable servitudes. An equitable servitude addresses the same types of land uses as restrictive covenants but they are enforceable under principles of equity (i.e., fundamental fairness and justice) instead of under principles of law. It permits neighbors to go to court to prevent another neighbor from violating the land use restrictions by issuing an injunction ordering the offending party to comply with the restrictions, such as prohibiting the parking of an RV in the driveway. While you can go to court and get paid money damages for the violation of a restrictive covenant, you can't get money damages for violation of an equitable servitude.

Easements

Marty's property borders hole nine of the community's golf course. When he bought his house, he took it subject to an easement, which is a nonpossessory interest in land that gives someone the right to make a specific use of your real estate. In Marty's case, the easement is held by the golf course and permits its greens keeper and maintenance personnel to work on a 10-foot wide by 90-foot long strip running along Marty's back yard that abuts the course for purposes of maintaining the links. In fact, Marty can't do anything with that strip of land that would interfere with the course's use, such as putting up a fence.

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