City of Austin: Everything You Need to Know About Restrictive Covenants

March 14, 2016 by Bailey Harrington

The BIG RED DOG Austin team breaks down restrictive covenants: what they are, some of the most common restrictions, and how they can affect your future project in the City of Austin.

12_AustinSkylineSunsetWhat is it?

A restrictive covenant is a legal contract that binds the owner to the land and limits what the owner can do with respect to the conditions of the legal document. Restrictive covenants are commonly used by land developers who wish to place limitations on a land or grant responsibilities to landowners. For example, a square footage requirement can be placed by the land developer and enforced through the restrictive covenant. Restrictive covenants are also commonly used by public entities to ensure the site will adhere to code-mandated requirements.

When is it needed?

Restrictive covenants should be considered prior to purchasing a property since the limitations may affect the owner’s intended use of the property. Once a lot has been purchased, the owner of the lot is held accountable by the restrictive covenant to obey the limitations of the land. If the owner decides to resell the land, the new owner must honor these same limitations. Simply put, restrictive covenants “run with the land”, and are enforced by all future owners.

What are some common restrictions?

Though restrictive covenants can vary depending on the land owner’s wishes, there are a few common limitations that include:

  • Integrated Pest Management (IPM) – The land developer may hold the property owner accountable for treatment and control of potential pests on the land. The owner may be required to upkeep property landscape, regularly monitor the site for pests, fertilize the land, and more.
  • Minimum/maximum lot size – There may be limitations that the property may not exceed or fall below a certain lot size in order to maintain uniformity among the community or property area. This is not to be confused with a zoning ordinance, which may regulate lot size and specify use. In some situations, the zoning ordinance may hold power over the restrictive covenant and vise versa. This decision is made by the court.
  • Limited use – The property may be restricted to commercial or residential use.
  • Construction/alteration – This may include exterior painting, fence building, landscaping, and other aesthetic restrictions. The purpose of these limitations is to ensure the quality of the property is maintained within the community or surrounding areas.

What are the benefits?

Although a restrictive covenant may seem like a burden to the property owner, there are many benefits. A restrictive covenant may ensure a standard order within a community by maintaining a consistent design within the property. It may also prevent a decrease in property value if the developer decides to restrict certain exterior designs that could potentially be aesthetically displeasing to passerby (such as painting the outside, or landscaping).

Why should you care?

Restrictive covenants are extremely important to recognize because if the owner violates any limitations, they are subject to a lawsuit or other form of legal action. Extensive research should be done prior to purchasing property in order to avoid unwanted restriction violations.

Our site and land development teams have market-leading experience in the successful delivery of hundreds of land development projects throughout Texas. If you have questions about developing a project with restrictive covenants, we’re here to help. Contact our Austin office today to learn how to put our experience to work on your next project.

Written by Bailey Harrington

Bailey Harrington

Bailey Harrington is our Hospitality Services Market Director and is a BIG RED DOG shareholder. He is a graduate of the United States Military Academy, and is a licensed professional engineer in the state of Texas with more than five years of engineering leadership experience as a project manager leading engineering projects in the United States and Afghanistan.