What are covenants, conditions & restrictions (CC&Rs)?

Covenants, conditions and restrictions (CC&Rs) are recorded restrictions against the title to real estate prohibiting or limiting specified uses of the property in a subdivision or common interest development (CID)

Developers subdivide land into two or more horizontal or vertical sections called lots, parcels or units. Having created a subdivision, developers place restrictive covenants on how the lots may be used by later owners, called successors.

Use restrictions are usually contained in a document called a Declaration of Covenants, Conditions, and Restrictions (CC&Rs). CC&Rs are typically recorded with the original subdivision map.

Recorded documents in the chain of title to a parcel of real estate place a buyer on constructive notice of their contents.

A prospective buyer of a home in a subdivision protects themselves from unknowingly buying property burdened with unwanted restrictions by reviewing a preliminary title report (prelim) with their agent prior to acquiring a property. A prelim discloses the results of the title company’s search of the property’s title history.

The prelim functions with the very limited purpose of the title company’s revocable offer to issue a title policy. As customer service, title companies supply copies of any CC&Rs of record to buyers or their agents on request.

Role of the seller’s agent

Unless a seller’s agent is ignorant of their duties owed to prospective buyers and buyer’s agents, they know what homeowners’ association (HOA) documents are needed to properly market and disclose property information, collectively called transparency.

HOA disclosure documents inform the buyer what use and operating restrictions they will be subject to and the recurring costs of the HOA assessments. Without knowledge of this information before making an offer to buy, the buyer has insufficient information to decide whether to buy the unit and on what terms. [See RPI Form 135]

Accordingly, it is at the listing stage that the seller’s agent needs to prepare the seller’s request for the HOA to deliver the CID documents concerning use restrictions and HOA management and finances. The request form signed by the seller grants the HOA authorization to supply the seller’s agent with the requested copies of the HOA documents.

Within ten days after the postmark on the mailing or hand delivery to the written request, the HOA is to either:

  • mail physical copies of the requested documents to the seller’s agent;
  • email digital copies of the documents to the seller’s agent and the seller; or
  • inform the seller’s agent where the requested documents are available in a digital format online. [CC §§1368(a); see RPI Form 135]

CC&Rs and future owners

Recorded CC&Rs bind future owners of the subdivided lots, referred to as covenants running with the land.

For a covenant to run with the land and affect title and future owners, the restriction needs to directly benefit the property. Thus, to benefit one lot, all lots within the subdivision need to be burdened by the restriction. [Calif. Civil Code §1462]

Further, restrictions on selling, leasing or encumbrancing real estate may not unreasonably restrict the marketability of the property, even if the restriction is contained in a trust deed or lease agreement. [CC §711]

For example, CC&Rs on the installation or use of a solar energy system are unenforceable if the restrictions significantly increase the cost of the system or decrease its efficiency by:

  • resulting in more than a 20% increase in the installation cost of the system; or
  • decreasing the operating efficiency of the solar system by more than 20%. [CC §714]