What is a Restrictive Covenant?

When a homeowner purchases a home controlled by an HOA, the homeowner (and the HOA) agrees to and are bound by certain restrictive covenants. These covenants are stated in the governing documents of the HOA⎯specifically, the HOA’s Covenants, Conditions, & Restrictions (“CC&Rs”).  Typically (or rather, hopefully), all of the HOA’s governing documents are provided to the home buyer prior to or at closing. Unfortunately, although understandably, because these governing documents are filled with hundreds of pages of legal jargon, the vast majority of homeowners do not care to read these restrictive covenants prior to purchasing their home, nor do they even know where to look.

Here is what you need to know about restrictive covenants:

In essence, a restrictive covenant limits the permissible uses of land within the HOA. In other words, they provide the homeowner with a set of limitations as to what they can and cannot do with their property. These restrictions can be wide ranging; however, most homeowners encounter issues when attempting to modify or alter their property or landscape in some way.  Restrictive covenants are treated as contracts between the homeowner and the HOA, and a breach of these covenants can result in one party seeking legal remedy against the other. A 2017 Texas Court of Appeals case described restrictive covenants as such:

“A declaration containing restrictive covenants in a subdivision defines the rights and obligations of property ownership, and the mutual and reciprocal obligation undertaken by all purchasers in a subdivision creates an inherent property interest possessed by each purchaser.” 

It is important to note, however, that any restrictive covenant must not violate any Texas statute⎯most importantly, the Texas Property Code⎯or else it is a violation of Texas law. Texas Property Code §§ 202.003 & 202.004 lay the groundwork for the construction and enforcement of restrictive covenants: 

Texas Property Code § 203.003

(a) A restrictive covenant shall be liberally construed to give effect to its purposes and intent.

(b) In this subsection, “family home” is a residential home that meets the definition of and requirements applicable to a family home under Chapter 123, Human Resources Code. A dedicatory instrument or restrictive covenant may not be construed to prevent the use of property as a family home. However, any restrictive covenant that applies to property used as a family home shall be liberally construed to give effect to its purposes and intent except to the extent that the construction would restrict the use as a family home.

Texas Property Code § 203.004

(a) An exercise of discretionary authority by a property owners’ association or other representative designated by an owner of real property concerning a restrictive covenant is presumed reasonable unless the court determines by a preponderance of the evidence that the exercise of discretionary authority was arbitrary, capricious, or discriminatory.

(b) A property owners’ association or other representative designated by an owner of real property may initiate, defend, or intervene in litigation or an administrative proceeding affecting the enforcement of a restrictive covenant, or the protection, preservation, or operation of the property covered by the dedicatory instrument.

(c) A court may assess civil damages for the violation of a restrictive covenant in an amount not to exceed $200 for each day of the violation.

Courts tend to hold that the intent of any particular restrictive covenant shall be interpreted by a court if the covenant is disputed. However, courts will hold common law rules favoring the “free and unrestricted use of land” over all else. Furthermore, courts have held that any ambiguity in a covenant must be strictly construed against the party seeking to enforce the covenant. 

While this blog is intended to be an overview of restrictive covenants, each situation and covenant is unique and deserves its own analysis as to whether it is binding on a homeowner and whether it complies with Texas law. 

Julian Nacol
Nacol Law Firm P.C.
Dallas Texas HOA Attorney
(972) 690-3333