Restrictions on owners? Request the documents


Time and time again over the years I have been involved in situations where misunderstandings and misinformation have caused problems in the use of residential property.

I am talking about the restrictions that govern such matters as the type or color of the roof, the parking of trailers in the aisles, the accommodation of animals, the type and location of fences, sheds, etc.

This happens through the representation of both home associations and landlords when a problem arises.

A typical scenario is where a potential home buyer asks the real estate agent or seller if they are buying the residence, would they be allowed to build a fence, park a boat trailer in the driveway, setting up a basketball goal or raising llamas in their backyard, where they are told “yes, that shouldn’t be a problem,” only to learn later that their confidence in such performances is misplaced.

And so, once the buyer has bought the property, when he begins to install his pink roof, build his chain link fence, park his boat trailer in the driveway, and unload his pet llamas in backyard, only then does he learn that there is controversy when they start hearing from neighbors, their homeowners association, and perhaps lawyers saying it is not allowed.

This is because neighborhood restrictions are enforced by documents setting out rules and restrictions, and are recorded as a public record with the recorder, not word of mouth from people who have no idea.

In this way, potential buyers and landlords are deemed to have been made aware of the registered rules and restrictions that apply to their neighborhood, regardless of what a home seller or real estate agent may tell them, home sellers and real estate agents with a financial incentive to ignore any factor that may prevent the deal from closing.

And, if properly recorded when a new owner takes title, misinformation from the realtor or seller is of little benefit to an owner who violates these restrictions based on bad advice.

So what should a potential buyer do to protect themselves from such a surprise?

The answers lie deep in the many documents that are shuffled, signed and handed out during any door-to-door sales transaction.

A standard real estate contract provides that the seller is required to take out a title insurance policy with a title insurance company providing good title to the buyer.

The first step in this process is for the title insurer to agree to issue title insurance within a specified time frame after signing the contract – typically 10 to 30 days after signing the contract – which must be delivered to buyers.

The title commitment will include a list of exceptions, which may encumber the absolute title of the purchasers, such as easements for public services; the public right-of-way of the road serving the house, which generally extends from the center of the road to part of the yard; taxes and assessments imposed on the property; and restrictions and registered commitments that can establish dues and house association rules on what a homeowner can and cannot do with their property.

So, once the potential buyer obtains his title commitment and has the opportunity to identify any issues affecting the property he is committed to purchase, and finds any of these restrictions untenable for his wishes and intentions, he has the right, within a period of time, to inform the seller of his objection and, ultimately, to withdraw from the contract if it cannot be remedied.

This is how it works.

And so, if a potential buyer of property has concerns about their intended use from a restrictions perspective, your best bet is to look at the title commitment, get a copy of any registered restrictions identified in the exceptions. and read them carefully.

Do not rely on verbal assurances from someone who has the financial incentive for you to ignore such concerns and buy the property regardless.

Ken Garten is a lawyer from Blue Springs. Email him at [email protected]

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