Property Deed Restrictions: Enforceable or Not?
When an owner transfers property, he or she may wish to place certain restrictions in the deed in order to limit the new owner’s use of the property. Such deed restrictions (also known as restrictive covenants) typically “run with the land” – meaning they are not personal to the owner and will affect future owners.
A typical deed restriction might be something like the following:
Grantee retains the right to use the land for hunting purposes.
The Property may not be rented or leased to any third party.
No trees may be removed from the three acres of the Property bordering Razorback Creek.
Grantee retains the right of first refusal and option to purchase, in the event Grantee wishes to sell the Property to a third party.
While most deed restrictions are valid, those that violate public policy are unenforceable. For example, restrictions that bar the grantee from transferring the property to anyone are considered a restraint on alienation because they prevent the free flow of property. A restriction that limits transfer of the property to buyers of a certain race is invalid.
In Ohio, the legislature and judiciary have also considered the validity of specific deed restrictions. In 2003, the Ohio General Assembly amended the statutes to specifically provide that deed restrictions prohibiting flagpoles or the display of the American flag were invalid. In 2012, the Ohio Supreme Court held that a public school district could not sell a vacant school building for sale with a deed restriction preventing the property to be used for school purposes, because Ohio’s public policy supports community schools.
If you are selling property, you may want to consider inserting deed restrictions into the transfer documents, particularly if you will live nearby or gain some value from the restrictions (be it a protected view, the option to buy back the property, or some other benefit). If you are a buyer, hire a reputable company to perform a title search before purchasing the property to make sure that you are informed about any existing deed restrictions which may affect your use.
A version of this post was originally published by Mallory Law Office, LLC.