Need Amendment to previous developers covenants and restrictions

Need Amendment to previous developers covenants and restrictions

Real Estate Agent · San Antonio, TX · Member since 2018 · 32 posts · 33 votes

Has anyone had any experience working with small neighborhood associations to get covenants and restrictions amended?

We have a piece of land in a great location of San Antonio under contract to purchase, it's approx. 1.5 acres.  It has never been developed due to no infrastructure (sewer and a street need to be put in) but home values have increased significantly in the area and the project would now be viable even with this massive cost. 

Our title co. found a set of restrictions and covenants put in place in 2011 when an old developer owned the property.  The parties on the documents are the declarant (developer) and a tiny neighborhood association that appears to be just one guy.  His name is all over it saying nothing can change without his approval.  

The biggest kicker is that it says the lots have to be double the size of what we expected, cutting our total number of buildable units in half and thus making the expense far outweigh the benefit.  

We've called the guy multiple times and he's only answered once, with a gruff and whatever attitude toward the whole thing.  We went by his house just a block from this land and tried to have a talk with him but he just wanted us to leave a bunch of paperwork with him and he'd get to it "in a few weeks".  

Any ideas on how to motivate someone in this scenario that has no real motive or interest in helping us?  

The prior developers should never have agreed to these restrictions when they rezoned from MF-33 to residential zoning as the numbers simply do not pan out.  That much is obvious because they never built and eventually they were foreclosed on and had a huge lien on the property from the old engineer they worked with. 

I've consulted with a few attorneys and there really is nothing we can do outside of working with this individual.  

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Joel OwensBusiness Member
Moderator
Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
6y

The guy holding the deed restrictions might care less about money. I would not just offer him money that might insult him like he can be bought.

Developers like to come in and throw money around and it can piss people off. I have seen it where huge developers come in an area and think everything should happen when they want. The smarter larger developers tend to partner with local developers who are respected in the community and have personal connections to the county/cities. The tend to know (how to do business) on a local level and get things approved and moved along.

If the guy holding the cards doesn't want density he probably could care less about your personal situation or wanting the numbers to work etc. He might want it to remain raw land that never gets touched.

Probably back in the day the defunct developer penciled in cheaper labor and construction costs to try and make lower density work and even back then found out it wasn't feasible.

Probably the cheapest thing you might could do is offer to take the guy to dinner on you and see where he is coming from, show empathy, and see if there is a WIN-WIN in there somewhere.

If not sometimes the juice isn't worth the squeeze at all ever or just ( that particular moment in time ).

You do not want to obligate yourself to thin deals. You want risk LOW and UPSIDE high. I listen to the knowledge of developers that own millions of sq ft of space and hear their words of wisdom gained over decades of time.

You have given this guy nothing of value to feel obligated to try and help you out. If you do not feel like meeting in person because of Covid maybe ask him for his favorite food place and send him a gift card as a nice gesture. Money alone doesn't have as much impact standing by itself unless someone worships money which actually not many people do. They love what money (can do for them) and not the money itself. So giving a gift card or otherwise finding out the interest of the person you are trying to interact with shows you took personal time to understand them and make a high energy effort to connect.

That favorite restaurant could have been where they had a first date, learned they were having a child, kids graduation from high school, whatever. It's a memory from life which can be much more powerful than money alone for personal connection.

When I assembled land for a commercial developer I had to get into the mind of the property owner and build rapport on a deep level and learn their story and their life. Sometimes it took 6 months or more to reach agreement on a contract and a price. In this instance it's the person not owning but the association and the person over it that has the real control to decide.

No legal advice given.

See this reply in the discussion

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  • Wholesaler, Rehabber and Landlord · San Antonio, TX · Member since 2014 · 2k+ posts · 2k+ votes
    6y

    It sounds like you got your answer. That was probably the reason that you got the property under contract so cheap, you can't do anything with it until he dies. Sounds creepy, but maybe that was his intention that the property would NOT be developed until he was gone. Or if it was, it was going to be to his liking.

    You could always hold it long term.

  • Mike CumbieBusiness Member
    REALTOR® · Brockport, NY · Member since 2015 · 3k+ posts · 4k+ votes
    6y

    Stick a piece see of paper in front of him removing all restrictions with a check. 

    Or A sign. "Future site of Randy's hog farm" or the most undesirable thing the restrictions don't stop. "Future site of sex offender rehabilitation community". Since things are spread out it was our only option.....

  • Real Estate Broker · Portland, OR · Member since 2019 · 4k+ posts · 2k+ votes
    6y

    Go ask title what it'll take to change/get rid of the CCNRs.  Seems pretty obvious it's the one guy.

    You're stuck without some go-away money.

  • Joel OwensBusiness Member
    Moderator
    Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
    6y

    The guy holding the deed restrictions might care less about money. I would not just offer him money that might insult him like he can be bought.

    Developers like to come in and throw money around and it can piss people off. I have seen it where huge developers come in an area and think everything should happen when they want. The smarter larger developers tend to partner with local developers who are respected in the community and have personal connections to the county/cities. The tend to know (how to do business) on a local level and get things approved and moved along.

    If the guy holding the cards doesn't want density he probably could care less about your personal situation or wanting the numbers to work etc. He might want it to remain raw land that never gets touched.

    Probably back in the day the defunct developer penciled in cheaper labor and construction costs to try and make lower density work and even back then found out it wasn't feasible.

    Probably the cheapest thing you might could do is offer to take the guy to dinner on you and see where he is coming from, show empathy, and see if there is a WIN-WIN in there somewhere.

    If not sometimes the juice isn't worth the squeeze at all ever or just ( that particular moment in time ).

    You do not want to obligate yourself to thin deals. You want risk LOW and UPSIDE high. I listen to the knowledge of developers that own millions of sq ft of space and hear their words of wisdom gained over decades of time.

    You have given this guy nothing of value to feel obligated to try and help you out. If you do not feel like meeting in person because of Covid maybe ask him for his favorite food place and send him a gift card as a nice gesture. Money alone doesn't have as much impact standing by itself unless someone worships money which actually not many people do. They love what money (can do for them) and not the money itself. So giving a gift card or otherwise finding out the interest of the person you are trying to interact with shows you took personal time to understand them and make a high energy effort to connect.

    That favorite restaurant could have been where they had a first date, learned they were having a child, kids graduation from high school, whatever. It's a memory from life which can be much more powerful than money alone for personal connection.

    When I assembled land for a commercial developer I had to get into the mind of the property owner and build rapport on a deep level and learn their story and their life. Sometimes it took 6 months or more to reach agreement on a contract and a price. In this instance it's the person not owning but the association and the person over it that has the real control to decide.

    No legal advice given.

  • Joel OwensBusiness Member
    Moderator
    Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
    6y

    Another thought is you could give a personal letter like you have with your family picture on here talking about the life you are trying to build and legacy for your family. Maybe the older gentleman thinks back to when he was starting out trying to make a place in the world for himself you never know. 

    Big developer projects that's not usually a fit to try but a small project on a scale talking to an individual like this of a small association might work. Kind of like a first time home buyer letter but this is used on smaller development projects for developers getting going. It shows a personal nature to your interaction and your dreams and thoughts instead of a robotic developer that wants him to do something for them.

    No legal advice given.

  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    6y
    Originally posted by @Steve Morris:

    Go ask title what it'll take to change/get rid of the CCNRs.  Seems pretty obvious it's the one guy.

    You're stuck without some go-away money.

    Steve, in the FWIW file I think you can appreciate this tale..

    I went into contract on some dirt in Beaverton Old CCR's from the 50s overlay a pretty big area including ours.. which called for 15k sq ft lots and single story.. So as you know how metro zoning goes.. our zoning was 5 to 6k sq lots and you CANT go larger.. Oregon being funny that way they want to cram density so if you cant cram the density your project can get denied..

    So to your point about title co.. I finally found one of the locally owned one's at the time the nationals would not touch it..  But they would insure but not the two story homes.. Afraid of neighbors suing.. So we compromised with one story's on our lots were bordering the neighbors and two story on interior lots.  But they would not  insure smaller lots.

    So we went round and round with Beaverton Planning commission.. and explained our predicament.. at the end they allowed us the larger lots.. But one of the Commissioners on the record said.. WTF do we have zoning for if CCR's can trump them.. And the other developers who followed us just ditched those CCRS totally and built smaller lots and two story on each of them.. they got a title company to write around the CCR's so your absolutist correct that is one way to go bout this.. Most Cities I know of could care less about CCR's and don't enforce them. its the title companies and Risk of neighbor suits that drives this..

    Now this one being Texas I was always under the impression Texas was pretty loose on zoning to begin with. 

    Bottom line I like your advice start at a title company who wants the business. !

  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    6y
    Originally posted by @Joel Owens:

    Another thought is you could give a personal letter like you have with your family picture on here talking about the life you are trying to build and legacy for your family. Maybe the older gentleman thinks back to when he was starting out trying to make a place in the world for himself you never know. 

    Big developer projects that's not usually a fit to try but a small project on a scale talking to an individual like this of a small association might work. Kind of like a first time home buyer letter but this is used on smaller development projects for developers getting going. It shows a personal nature to your interaction and your dreams and thoughts instead of a robotic developer that wants him to do something for them.

    No legal advice given.

    in my experience with CCRs the declarent is the only one who can change them if no lots are sold.. like right now on my 90 lot project in Oregon I AM the declarent and I will be making amendments to my CCR's prior to the first lot being sold.. after you sell lots its much tougher to get everyone who is affected to sign off. And see my post above how I went about this with a 50 lot Project in Oregon that had 50s CCR's it was pretty wild really.. but came down to a title company that was willing to insure around the CCRs it can happen

  • Investor · Round Rock, TX · Member since 2010 · 8k+ posts · 4k+ votes
    6y

    Be careful which attorneys you take advice from.  They're not all created equally and many don't specialize in this area of the law and are unfamiliar with legislative changes and new case law.  See Exhibit A of this and see if it helps you:

    https://wcglaw.com/sites/default/files/publications/Amend%20Modify%20Restrictive%20Covenants.pdf

    I have amended CCRs for small platted subdivisions.  From what you described above I am not sure why you'll need the consent of this person who no longer owns the land, but there really isn't enough information in what you have provided to help much.  If the intent is to try to amend the CCRs prior to closing that's another story, but unless I am missing something and given solely the facts as you've presented them I am unsure why you couldn't just purchase the property and amend the CCRs on your own at that point.

    It could be that since the lots are unplatted what is linked above doesn't apply for some reason.  Regardless please speak to a firm that specializes in this stuff and not random Joe attorney who is a generalist.  Speaking to the firm with the paper listed above would be a good place to start.   

  • Ronald RohdePro Member
    Attorney · Dallas, TX · Member since 2016 · 5k+ posts · 2k+ votes
    6y
    Originally posted by @Bryan Hancock:

    Be careful which attorneys you take advice from.  They're not all created equally and many don't specialize in this area of the law and are unfamiliar with legislative changes and new case law.  See Exhibit A of this and see if it helps you:

    https://wcglaw.com/sites/default/files/publications/Amend%20Modify%20Restrictive%20Covenants.pdf

    I have amended CCRs for small platted subdivisions.  From what you described above I am not sure why you'll need the consent of this person who no longer owns the land, but there really isn't enough information in what you have provided to help much.  If the intent is to try to amend the CCRs prior to closing that's another story, but unless I am missing something and given solely the facts as you've presented them I am unsure why you couldn't just purchase the property and amend the CCRs on your own at that point.

    It could be that since the lots are unplatted what is linked above doesn't apply for some reason.  Regardless please speak to a firm that specializes in this stuff and not random Joe attorney who is a generalist.  Speaking to the firm with the paper listed above would be a good place to start.   

     I definitely agree you need the correct holder of the rights, but the way I read it, he's the adjoining landowner so its logical he's the beneficiary of the CCRs. You definitely cannot just buy and assume you can modify, these are restrictions in the deed, you'll get sued by the holder, its an easy TRO...

  • Real Estate Agent · San Antonio, TX · Member since 2018 · 32 posts · 33 votes
    6y

    Thanks for all the feedback everyone. After speaking with a few attorneys it appears we are going to fight some of the language and a non-attached/recorded exhibit and hopefully nullify the CCR's. More to come

  • Mike CumbieBusiness Member
    REALTOR® · Brockport, NY · Member since 2015 · 3k+ posts · 4k+ votes
    6y

    Good Luck!

    Hope it works out!

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