Are restrictive covenants legal?

On Behalf of | May 6, 2024 | Property Owners Association Law

Buying a home in a neighborhood that has a property owners association (POA) means playing by the rules they set. Restrictive covenants define what the property owner can and cannot do on the property. These are limitations set by the POA and usually voted on by the entire community, then enforced by the board.

Restrictive covenants are generally legally binding. If a property owner violates these, the POA may charge a fine and require the property owner to promptly address the issue. Failure to do so may result in legal action.

Examples of restrictive covenants

Some of the things that a POA may try to restrict include the color of the home, use of the home for business activities, whether property owners are allowed to rent the property to a third party, the size, number and breed of pets and the modifications or additions allowed to the exterior of the property.

The importance of restrictive covenants

Restrictive covenants can help the community. The POA exists to preserve property value and ensure that the neighborhood is not just visually appealing, but also a peaceful, safe and secure place to live. While it may seem trivial for the covenant to limit the paint color, it adds to curb appeal. This can lead to higher property values.

Restrictive covenants can also allow for easy dispute resolution. Because there is a clear definition of the kind of behavior allowed within the community, identifying and spotting violators is relatively easy. This can include barking dogs, noisy all-night parties, or any activity that disrupts the peace and order in the neighborhood.

What restrictive covenants cannot prohibit

In Texas, there are limits on what a POA can prohibit. They can generally regulate, but not outright prohibit, the display of religious items, political signs during election season and the American, Texan, or US Armed Forces flags. They also cannot prohibit the use of security cameras and motion detectors, as well as solar panels and energy devices and composting systems, to name a few. POAs in Texas generally can neither prohibit nor regulate lemonade stands and possession of firearms. POA boards are wise to seek legal counsel experienced in this area of real estate law to better ensure their restrictive covenants follow applicable laws. A failure to do so may mean the POA has a restrictive covenant that will not survive a legal challenge.

POAs that are looking to put together restrictive covenants, or who want to review to make sure their covenants are enforceable, are wise to keep these rules in mind.