Covenants are rules and regulations that govern how a property is used and maintained, according to Ward and Smith. The two common types of covenants are restrictive and obligatory. Planned communities and condominiums governed by an owner's association often require property owners to sign a set of covenants.Continue Reading
Restrictive property covenants apply to both commercial and residential properties, and they typically place limitations on how an owner may use the property, explains Ward and Smith. Other common restrictions apply to architecture and leasing conditions. Obligatory covenants do not restrict the way a property may be used, rather, they usually require owners to pay assessments to maintain common elements, such as a pool or a clubhouse. Owners associations normally require property owners to pay these fees regardless of whether or not they use the common elements.
Restrictive covenants on residential properties generally outline the purposes for which a residence can be used, notes Ward and Smith. An example of this would be disallowing the use of a residence for business purposes. Covenants and zoning ordinances are not the same, and in cases where both apply, the more restrictive of the two determines allowable uses for a property. Architectural restrictions may dictate how a property owner can modify items such as fencing, siding and structural design. Covenant restrictions related to leasing commonly outline the length of time a property may be leased.Learn more about Law