People who purchase real property in Massachusetts usually expect to use their right of quiet enjoyment as they see fit. In plain English, they anticipate having complete control over what they do with the property both inside and out. In reality, many properties are subject to restrictive covenants integrated into the ownership paperwork.
A restrictive covenant is a contract inclusion that limits current and future activities. In Massachusetts, restrictive covenants that apply to real estate can be enforceable for as long as 30 years, which means that the fine print in real estate paperwork can cause long-lasting headaches for property owners and investors. Restrictive covenants can address a wide assortment of different real estate decisions, but the three below are among the most common.
Prohibiting all but residential development
When people purchase unimproved land, they may dream of selling it to a developer later or developing the property themselves by building a multi-family apartment complex or a commercial facility. Such plans simply are not feasible in scenarios where there is a restrictive covenant limiting use to residential purposes. Those rules help prevent the over-development of certain areas and can help protect the characteristics of communities from changes spawned by commercial or industrial development of a single parcel.
Limits on home size and placement
Restrictive covenants often address the improvements erected on a parcel. They may require that the edge of a building fall a certain number of feet away from a property line or any existing structures. They may limit the house size to a certain percentage of the total land or a specific number of square feet. Such restrictive covenants can theoretically prevent people from building their dream homes on a vacant property or from replacing an existing structure with a substantially larger one.
Prohibiting home-based businesses
Many people might want to start a small company, but they need to keep their costs low. After hearing about how some of the biggest companies in the world started as projects in entrepreneurs’ garages, people may start planning to begin a business at home and then expand into commercial space when the company is solvent. Restrictive covenants can prevent people from doing exactly that by prohibiting the commercial use of any part of a residential property.
Reviewing the terms of existing restrictive covenants, or newly integrating them into property documents, can be a smart move for both buyers and sellers of Massachusetts real estate. Learning more about the various ways that real estate documents restrict land use and development can help people intending to invest in real property to make informed decisions about their options.
