Deed Restriction
I am looking at purchasing a property that was built as a duplex. About 15 years ago the buyers opened a couple of walls to create a single family home. Both kitchens, stairs, front doors etc are still in place. The property is in a development so I checked the deed restriction to make sure multi-family homes were permitted. I did find one deed restriction that the title company thought was a gray area. It reads "Property shall be used only for residential purposes". I was hoping for opinions from the board on the meaning of the restriction and if it would prevent the house being used as a duplex.
Thanks
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I'm certainly not a lawyer or an expert on deed restrictions, but based on the how it's written, I can't imagine that anyone would interpret to mean that the property couldn't be used as a duplex (or any other type of residential dwelling, for that matter).
But again, that's a non-expert opinion...
I'm certainly not a lawyer or an expert on deed restrictions, but based on the how it's written, I can't imagine that anyone would interpret to mean that the property couldn't be used as a duplex (or any other type of residential dwelling, for that matter).
But again, that's a non-expert opinion...
Hmm.... I would consult with my title attorney for a better explanation other than "It's a grey area"
IMHO you should be fine. The property is still going to be used for residential. You renting it out as a single or multifamily shouldn't be affected by the restriction.
If you were going to convert 1/2 the building to office space or retail space that would be a different matter imho.
Best of luck and please consult with a attorney before investing any additional funds.
Are you talking deed restrictions or zoning?
You need to check the zoning with the county, deed has nothing to do with it, your title company should know better.
This isn't true...be careful...
If there is a deed restriction limiting use and that deed restriction is more restrictive than the local zoning restrictions, then the deed restriction will have EVERYTHING to do with it.
Any time a deed restriction is more restrictive than a zoning ordinance (assuming it's legal), the deed restriction will impact use.
(I believe) An original builder can place restrictions like no property subdivision. But forbidding from using the property as a rental property? Especially if the property was built as a duplex (based on the first post), restricting the use of property as a multi-unit property does not make any sense, does it?
(Again, I believe) The County decides how the property can be used, not the original builder.
We need Ron to post and clarify some things. Also, rentals are residential so I do not see why you cannot use it as a rental. I read it as you cannot built commercial or industrial on it.
Hey George,
Actually, any owner of a property can assign restrictions in the deed that dictate future use (and non-use) of the property.
As an example, Fannie Mae puts a restriction on the deed that says if you buy one of their foreclosures, you can't resell for at least 90 days at more than 20% above your purchase price.
If a fast food restaurant owns a piece of land that it sells to a franchisee, there is probably a deed restriction that the property can't be used as a competitor's restaurant for many years into the future.
A long time ago, there were deed restrictions on who could buy a property based on the color of their skin or their religious affiliations. While these are not legal and can't be enforced any longer, you'll still find the restriction written right on the deed every time the property is purchased or sold.
Basically, as long as you're not breaking any laws by doing so, you can restrict the use of a piece of land any way you want with a deed restriction. Including dictating that the land can't be used for income production, can't be used for commercial/residential/whatever, etc. You could even say in a deed restriction that the front door always needs to be painted RED, and that would be legally binding on all future owners of the property.
Of course, putting in restrictions makes the land/property much less desirable, but that's a risk the owner takes by incorporating a deed restriction.
And, in general, if a deed restriction conflicts with a local zoning ordinance, the more restrictive of the two will be enforced. For example, if the zoning says a piece of land can be used as a triplex and the deed restriction says it can only be used to created up to 2 units (a duplex), the deed restriction will win out.
Just to be clear. I am talking about a deed restriction, not zoning. There are no zoning issues that would prevent it from being used as a duplex.
If its on the deed, then I read it that you can use it as a duplex since a duplex is residential.
My thoughts are that the deed restriction is to prevent the property (and other properties in the development) from being used for commercial (business use). I would believe that many residential developments would have similar restrictions to prevent busy businesses from locating is a quiet development.
My Realtor (whom I trust) believes it is not a gray area. Fannie and Freddie will approve residential mortgages on multi-family dwellings (up to 4 units). Isn't a duplex a residential property for two families? I posted here to make sure I didn't miss anything in my logic.
Thanks for the replies.
I guess it'd be wise to put a clause in the contract that allows you breaking it upon unsatisfactory title examination. Not sure if it's already in the standard Realtor contract.
That's a great question...
Generally, state contracts will refer to getting "clear" or "unencumbered" title, and it's not clear to me whether a deed restriction would violate the definition of "clear" and "unencumbered."