A covenant when used in the context of real property is an agreement made between two private parties as to how land may be used. Whether put into a deed or part of a signed agreement between the two parties, a covenant is legally binding and may be enforced in court if necessary, assuming that it does not violate a law. Many observers believe that covenants tend to result in safer neighborhoods and higher home values.
Homes that are in neighborhoods with covenants tend to look better, and their owners tend to have a better relationship with local authorities. While similar to a zoning ordinance, a covenant involves private parties while a zoning law involves a government entity. A zoning ordinance has to be approved by a government entity, which means that the law is binding on all homeowners. As a covenant is a voluntary agreement, it may come with additional terms that a zoning law would not include.
In many cases, a covenant is considered one part of all restrictions placed on a homeowner who buys a property. Homeowners associations may be charged with enforcing some or all restrictions included in a deed or in a private contract involving an entire development. Home buyers are urged to get a copy of any CC&R paperwork prior to closing on a home purchase.
Prior to buying a property or lot, it is advisable to review any land use restrictions that may be in place. A real estate attorney can help a potential land or property buyer with the necessary research and review. As a general rule, it may be worthwhile to have the advice of an attorney whenever a prospective purchaser is asked to sign a binding real estate contract.
Source: FindLaw, “CC&R Basics”, accessed on Jan. 29, 2015