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What are Deed Restrictions and When are They Enforceable?

By Justin Camper • 10 Nov, 2022
What You Need to Know About Deed Restrictions Purchasing a home is a big decision — having all the information about the sale can make or break your experience. One potential problem that property buyers may run into is the possibility of a deed restriction, especially if the property is located within a homeowner’s association.  To learn more about deed restrictions and whether they can be bypassed, read below or reach our office today to speak to an experienced real estate attorney in  Hammond, Indiana  . Deed restrictions Also known as covenants and restrictions, deed restrictions are agreements regarding property usage that are made between landowners. Under deed restrictions, property may only be used for specified purposes, and certain uses or behaviors may be prohibited. Essentially, these restrictions are a condition of sale that limit how you can use your property. HOAs and other communities may utilize deed restrictions to keep property values high or to control the development of properties in a particular area. However, any seller may place a deed restriction on their property. Common deed restrictions What do deed restrictions look like? They can take a variety of forms, some of the most common being: Animal restrictions: These restrictions limit or prohibit certain types or breeds of animals. For example, many residential properties restrict the ownership of livestock animals. Vehicle restrictions: Vehicle restrictions may ban certain vehicles such as boats, trailers, work trucks, or even unlicensed or inoperable cars from being parked in driveways or on the street. Use restrictions: Home business restrictions are one of the more common deed restrictions and may prohibit you from operating your small business from your home, placing business signs in your yard, or even renting out your home on Airbnb or other similar platforms. Personal property restrictions: Some deed restrictions limit the items that you can have on your property. Items such as hot tubs, pools, sports equipment, and other things may be prohibited. Renovation or building restrictions: Fences, sheds, and other structures may be restricted to keep properties looking uniform or to ensure your neighbors enjoy an unrestricted view from their property. Additionally, some deed restrictions even go so far as to outline an acceptable appearance for the property. Under these restrictions, you may not be able to renovate the exterior of your home, choose a new façade color, or build with certain materials. How deed restrictions are enforced Deed restrictions are made between a buyer and seller and thus are contractual. They cannot be forced unknowingly upon a buyer; buyers must have notice of the conditions before they purchase a property. Deed restrictions will always show up when doing a title search, but buyers may also wish to talk to a realtor, real estate attorney, or someone from the HOA or local government office. Most of the time, the entity that creates the restriction is also the one that enforces it. Assignees, grantors, and their successors are all able to enforce a deed restriction unless it has previously been revoked. What’s more, deed restrictions are often passed on with the property. This means that they will apply to current and future buyers and may continue to be enforced by subsequent owners. Generally, the law doesn’t favor imposing restrictions on the free use of your property. Arbitrary or unreasonable deed restrictions are not considered acceptable and therefore may not be enforceable. However, the law will side with covenants and restrictions that: Are in line with public policy Do not violate constitutional or statutory provisions Are within reasonable bounds Have been clearly stated Some restrictions and covenants remain in effect indefinitely, while others may expire after a specified period. In most cases, deed restrictions are permanent and non-negotiable. What a deed restriction might mean for you If deed restrictions are clearly outlined and won’t affect your lifestyle, they may not mean much. However, if you purchase a deed-restricted property without a full understanding of what the covenants and restrictions are, you may find yourself in a difficult position. Perhaps you’ve purchased a home only to discover you’re not allowed to park your new RV near it. Or perhaps you’ve been visited by an HOA representative who’s there to let you know that the new fence you’ve just paid for is against the rules. Changing a deed restriction is difficult and often requires the property purchaser to go through a formal process with the restricting entity — oftentimes an HOA, home builder, or government body. It is far simpler to understand what deed restrictions are connected with your property before you complete the purchase. Where to learn more about your property’s deed restrictions If you’re worried about purchasing a deed-restricted property, rest assured that there are several sources you can turn to for help uncovering potential deed restrictions. Before you apply for a mortgage or make a purchase, you may wish to speak to: Your realtor. Your real estate agent can access relevant property records and previous listings to uncover any deed restrictions. The home builder. The developer or builder may be able to locate a list of deed restrictions attached to the property. The local governing body. Your county or municipal clerk can check historical property records for information regarding restrictions. A real estate attorney. If you have any questions or concerns regarding a deed-restricted property, an attorney can often help by researching, reviewing, or even contesting certain restrictions. Are you in the process of purchasing your first home? Avoid the consequences of unrecognized covenants and restrictions by engaging the right team before you make your offer. Reach out to  Justin Camper Law, LLC  in  Hammond, Indiana  for help discovering more about your property and outlining your options so that you can decide whether to move ahead with your purchase.

Paperwork and Real Estate: 3 Important Documents

By Justin Camper • 10 Oct, 2022
A real estate transaction involves well-defined steps, and each part of the process is accompanied by specific documents. Both buyers and sellers may find the amount of paperwork overwhelming. However, it is necessary to put everything in writing and provide supporting documentation to ensure every phase goes smoothly. Many people are involved in real estate transactions. In addition to agents and brokers, inspectors and appraisers, mortgage lenders, title companies, and lawyers are involved in the process. These professionals will either supply or request different types of paperwork. However, the most important documents in real estate are offers, agreements, and contracts between the buyer and seller. Here is a look at the three most important documents you will encounter when buying or selling a property in  Hammond, Indiana  . The Initial Offer When you are interested in purchasing a property, your first interaction with the buyer is the initial offer (or offer letter). This paper will include the amount you are willing to pay for the property, but it will also have other important information. If you are a buyer working with a real estate agent, they will handle most of the paperwork, but you will have to approve the details and sign the document. Here is a look at the information in an initial offer. You should include the seller's name and the legal address of the property. You will also need to include your legal name and the names of anyone else purchasing the property should the sale go through. This could be a spouse, partner, or other investors. You also need to mention the purchase price and information about the down payment amount. Are there any actions you need the seller to take before the sale? For example, you could list repairs or maintenance you expect. The document will also list the date you would like to close on the property. You will also mention a preferred timeline for a response to your offer. State laws differ, so there may be other requirements. A lawyer or real estate agent in  Hammond, Indiana  can ensure you include these details in your initial offer. Typically, you make the initial offer after being pre-approved for a mortgage. Most sellers require that you have funding in place before they accept the offer, though some may accept a contingency that requires mortgage approval before the sale goes through. The seller can accept or decline the offer, or they can draft a counteroffer. The document can include a different price for the property and changes to other details, such as the closing date or contingencies. The buyer and seller can choose to continue counteroffers until they reach an agreement on all the details. Purchase Agreement Once both parties accept an offer, it is time to draft a purchase agreement. This document is essential because it spells out all the details of the property and other important information about the sale. The purchase agreement is a legal document that becomes enforceable once it is signed by both buyer and seller. Therefore, it is essential to make certain all the details are correct. You can enlist the help of a lawyer to ensure the document includes everything necessary to protect your rights during the sale. Here is the information you can expect in a purchase agreement. The agreement must have a detailed description of the property, including location, dimensions, and condition. You should also include a date for the closing and all fees associated with the closing. You will also mention the selling price and information about a down payment. The purchase agreement should also provide a detailed description of any contingencies that both buyer and seller agreed to during negotiations. Common contingencies include having the home pass a final inspection or appraisal, the buyer getting final approval for a mortgage, or specific repairs getting completed. The seller needs to make disclosures on the purchase agreement. These are any known problems on the property. These issues could include past flooding or storm damage, septic tanks or wells on the property, or other issues like mold, radon gas, or lead paint. Once the buyer and seller sign the document, it is legal and enforceable, and the sale is set to go ahead as long as contingencies are met. The Deed All other real estate documents lead up to the transfer of the deed. The party holding the deed is the legal owner of the property. The deed includes the name of the buyer and seller and a detailed description of the property. Most importantly, the deed must contain proper legal language that conveys the transfer of property. A lawyer or title company typically handles this aspect of the deed to ensure it is legal. Finally, the seller (known as the grantor in legal terms) must sign the document and deliver it to the buyer. However, if a property has more than one owner, the other owners must sign, too. Technically, the transfer of property isn't officially complete until the buyer (known as the grantee in legal terms) accepts it. In most cases, this is merely a formality, but there could be some instances where the buyer rejects the deed. Other Supporting Documents These are the three most important documents needed for a real estate transaction. However, other paperwork is also necessary. Sellers need documents about the condition of the home, including inspection, maintenance, and insurance records, while buyers will need the financial records necessary to obtain a mortgage. These can include tax returns, bank and investment statements, and pay stubs. The transaction process will include inspection and appraisal reports that provide information about problems and the property's value. Do You Need a Real Estate Lawyer? A real estate lawyer in  Hammond, Indiana  can help you with the legal details of buying or selling a home. This is the largest purchase and most important investment most people will ever make, so it is essential to get all the details right to avoid any issues later. Contact our legal firm if you need help buying or selling your property.
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