What are restrictive covenants in real estate?

Restrictive covenants in real estate are legal restrictions on property use that are intended to protect the value and desirability of properties within a specific area. These covenants can dictate how a property can be used, the types of structures that can be built, and various other conditions that must be adhered to by property owners. By establishing these rules, developers or homeowners' associations aim to maintain a certain aesthetic, promote uniformity, and ultimately protect the investment of all property owners within the community.

For example, a restrictive covenant might prohibit homeowners from building fences taller than a specified height or from operating a business out of a residential property. This framework helps ensure that the neighborhood remains appealing and well-maintained, which in turn can help sustain or enhance property values over time. Understanding the role of restrictive covenants is essential for anyone involved in real estate transactions or management, as they can significantly impact property use and value.