Restrictive Covenants and California Real Estate

Legal News GavelAuthor: Staff

Ownership of real property in California includes various rights, along with a wide range of restrictions. The specific restrictions will vary from one location to another. Property owners may restrict the use of a piece of property by subsequent owners through restrictive covenants, which are included with the documents transferring title. Some restrictive covenants “run with the land,” meaning that they are binding on subsequent owners of the property. In planned residential developments, the covenants, conditions, and restrictions (CC&Rs) enforced by a homeowners’ association (HOA) include restrictive covenants affecting the use of individual properties. In relatively rare cases, the grantor of a property may set restrictions on the use of the property, resulting in loss of title by the grantee if they violate those restrictions. California real estate investors should carefully examine any possible restrictive covenants affecting property.

Public versus Private Restrictions

Zoning regulations restrict the use of private property across the territorial jurisdiction of a city or county government. All properties within an area zoned for residential use, for example, are subject to similar restrictions. Government agencies are empowered to issue permits for construction and other activities on private property, and to investigate and prosecute violations of the zoning regulations.

Restrictive covenants are found in the documents transferring title from a grantor to a grantee. Their effect does not extend beyond that specific property or properties. The responsibility for enforcement usually falls to an affected property owner or an HOA. In some situations, however, private restrictive covenants may become a matter of public concern, giving a city of county the authority to enforce it under its “police power.” See, for example, the 1976 California appellate court decision Scrogings v. Kovatch.

Restrictive Covenants

Private restrictive covenants are often included in deeds conveying part of a larger property that has been subdivided. For example, a property owner who sells part of their land might include a restrictive covenant prohibiting construction that would block their view of the ocean. This type of restrictive covenant is usually enforceable if it is clearly indicated on the deed conveying the land to the current owners.

Restrictive covenants also have a controversial history. Many neighborhoods around the country, including in California, used restrictive covenants to keep out individuals of certain races. Those restrictive covenants were declared illegal decades ago.

Covenants that “Run with the Land”

A restrictive covenant may retain its legal force over subsequent purchasers if it meets the requirements set forth in § 1468 of the California Civil Code. The covenant must be included in any deeds conveying the property, and must be recorded in the county where the property is located.

Restrictions on Land Use by Grantors

Under California law, and most state laws, a deed from a grantor to a grantee allows the grantee to do what they wish with the property, subject to zoning laws and the like, with no further obligation to the grantor. In legal parlance, this is known as an “absolute fee simple estate.”

A “defeasible fee simple estate” sets restrictions or conditions on the grantee. For example, a grantor could state in the deed that the land is conveyed to the grantee unless some event occurs, like the grantee uses the land for a prohibited purpose, or fails to use it for a required purpose. In that event, the land would either revert to the grantor or pass to a designated transferee. The grantor or transferee must affirmatively assert their rights. These types of estates are rare in the modern world, and they must be stated clearly and unambiguously in the deed.

More Blog Posts:

Easements and California Real Estate, Titles and Deeds, June 29, 2018

Common Problems Encountered in California Real Estate Title Searches, Titles and Deeds, June 18, 2018

When San Diego Real Estate Investments and Land Use Regulations Collide, Titles and Deeds, April 20, 2018