What Are CC&R’s In Real Estate
CC&R’s - Covenants, Conditions & Restrictions
CC&R’s are Covenants, Conditions and Restrictions that control, maintain and preserve the character of a residential community. Many of us are familiar with them in our own neighborhoods as part of the governing documents recorded on title. They tell us what we can and cannot do with our real and common property within the community, and also define certain codes of conduct for residents. The effectiveness of CC&R’s is directly related to their specifics and clarity of purpose, the understanding of the property owners, and enforcement by the governing body.
Typical Structure of CC&R’s:
The owner Company, as Declarant, will use legal counsel to draft the documents. Then they are executed and legally recorded. This includes declaration of easements, road maintenance agreements and the establishment of an architectural control committee as advised by counsel.
I am frequently asked, “what are CC&R’s in real estate”? Also, what should be covered in CC&R’s and associated documents? I am providing a partial example from the fictional Plat of XYZ as an example. Remember that CC&R’s and associated documents are specific to each project and governing laws, so this is an illustrative and fictional example only, NOT a complete document. Since I mostly develop large lot rural land, this example will demonstrate some key considerations for that type of project where I maintain rural character while placing important restrictions.
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RECITAL:
Reference the legal description:
Declarant is the owner of real estate located in ___________ County legally described in that certain record of survey recorded with the __________ County Auditor's Office under Auditor's File No.________, Volume __ of Surveys, pp 000-000. This real property is commonly referred to and will hereinafter be referred to as the Plat of XYZ.
Further intent to subdivide:
Parcel __ of the Plat of XYZ (hereinafter referred to as Lot __, consists of approximately ____ acres (any reference hereinafter to Lot __ shall also include any further subdivisions of the same) which Declarant intends to further subdivide.
Declaration statement:
Declarant hereby declares that all of the lots (including any further subdivisions of Lots) within the Plat of XYZ, shall be held, sold and conveyed subject to and together with the following easements, restrictions, covenants and conditions, all of which are for the purpose of enhancing and protecting the value, desirability and attractiveness of the real property.
GENERAL PROVISIONS:
Easements, covenants restrictions and conditions are listed as set forth. I make sure that these provisions are binding on all owner parties and “run with the land”, which means any parties acquiring any future right, title, or interest in the community are similarly bound.
AREA COVERED:
Define the area covered by the Covenants as the Plat of XYZ, as defined in the referenced legal description that was shown, above.
ENFORCEMENT:
I usually use arbitration to govern any dispute proceedings between parties:
The legal right to commence a proceeding against a person and/or entity violating or attempting to violate any covenant is granted.
ENFORCEMENT PROCEDURES:
A written notice is served on the violating owner(s), who are granted 20 days to respond in writing. The responding party or parties are deemed to accept the Designated Arbitrator if they fail to respond. The Arbitrator is solely responsible for determining the issues and must have practiced law within the state of ______for a minimum of 7 years and they must be currently licensed to practice law within the state.
An arbitration hearing will be held related to the issues, and the arbitrator is empowered to impose sanctions upon any party failing to respond. Each party involved is responsible to bear its own arbitration costs and expenses.
The arbitrator cannot change or amend the provisions of the Declaration of Covenants, Conditions, Restrictions and Easement documents. All parties are to be bound by the arbitrator’s determination. The arbitrator’s decision will be final and binding.
ADDITIONAL DECLARATION STEPS:
Define the plat by name and legal description and the Auditors recording number.
State the provisions for how the document can be amended and the % of votes required.
Protect the core document so that if there is a judgement or court order, the remainder of the document will be in full force and effect.
Contemporaneously declare and record the easements and any common area and road maintenance agreements.
Bind all current parties and parties of future conveyance to the documents and/or subsequent amendments, in their entirety.
EASEMENTS:
Create easements for installation of roads and utilities.
Define how they are to be maintained and who is responsible.
Define lot and road drainage requirements.
USE RESTRICTIONS:
No lot shall be used except for residential purposes. Manufactured homes and/or non-site built structures, such as, but not limited to modular homes, shall not be allowed unless specifically approved by the Architectural Control Committee as hereinafter described. Further, no building shall be erected, placed or permitted to remain on any lot other than one detached single-family dwelling with a minimum of a double attached or detached private garage, except for the following exceptions:
Additional outbuildings and/or barns necessary to stable and/or house animals owned by the owner of the pertinent lot and/or for the keeping of a recreational vehicle and/or boat, or any other use as approved by the Architectural Control Committee;
A guest house ancillary to the residential home which may be utilized for the temporary lodging of guests and/or family members of the owner of the main residential structure located thereon;
ORDER OF CONSTRUCTION:
With respect to the exceptions set forth in the items above, commencement of construction of said structures shall not begin until the single-family residential home constructed by the lot owner is substantially complete, and further, said structures shall be constructed in conformance with the architectural design of the residential home constructed on said lot and further, with respect to any barn and/or outbuildings, referenced above, the same shall be placed in a location on said lot which will reduce the visibility thereof to the other lot owners to a minimum
ADDITIONAL PROVISIONS:
Notwithstanding the residential characteristics set forth, an owner shall not be prohibited from growing trees, i.e., tree farm, or from having domesticated animals or livestock for their own purposes so long as they do not become a nuisance. Adequate measures must be taken to ensure that all animals are confined within the perimeter of each lot.
DWELLING SIZE:
The total floor area for any primary dwelling shall not be less than 1,800 square feet of living area, excluding the basement, any porches and/or garages. As indicated above, all dwellings must have at least an attached or detached two (2) car private garage. In addition, any ancillary guest house built by the owner shall not exceed 1200 square feet of living area.
ALLOWED CONSTRUCTION MATERIALS:
Roofing materials must be cedar shingle, shake, tile or 25-year composition, or better. Provided, no 3-TAB composition roofing shall be allowed. Provided, further, certain types of metal roofing may be approved by the Architectural Control Committee created below. Exterior building siding materials shall be nonplywood-type wood (beveled or grooved), vinyl or masonry, provided, however, colored metal siding and roofing, with the exception of the ancillary guest house, is acceptable for outbuildings. Further, the color of the exterior of all structures, whether at the time the structure(s) is originally constructed or when it is remodeled, shall be subject to approval by the Declarant, or the Architectural Control Committee.
DWELLING PLACEMENT:
In order to protect the view of all Lot Owners within the Plat of XYZ, dwellings and/or any other structures shall be located so as not to unreasonably interfere with the view of any neighboring lot. Further, no structure shall exceed a height of 35 feet, such height to be measured from the average elevation of the finished grade and measured from the middle of the proposed structure to be built. Placement of any structures shall be subject to approval by the Declarant or Architectural Control Committee. Further, the Architectural Control Committee shall have the right to require a Lot owner to physically indicate the maximum allowable height for the structure before construction of the structure actually begins.
CONTRUCTION COMPLETION:
Any dwelling or structure erected or placed on any lot in this subdivision shall be completed as to external appearance, including finish painting, within nine months from date of start of construction.
LANDSCAPING:
All front yard landscaping must be completed within a six (6) month period of time from the date of issuance of an occupancy permit for a lot. As defined in this section, "fencing" shall mean any barrier or wall. All fences shall not exceed a height of six (6) feet. Fences shall be well constructed and shall not detract from the appearance of the development. The type and placement of all "fencing" shall be subject to approval by the Declarant or Architectural Control Committee.
CONSTRUCTION DAMAGE:
All lot owners will be responsible for any and all damage to street, ditches, storm drainage or any other damage resulting from dwelling construction activities and also for providing clean-up of the streets, and construction site, if necessary, as a result of construction activities. In the event that the owner does not make such repairs within 30 days following the completion of construction activities or within 15 days following written notice by the Declarant, the Declarant reserves the right to proceed with said repairs and to collect the cost of doing so from the owner through due process of law not to exclude any applicable lien rights. In the event that the owner does not clean up any construction debris within three (3) days following written notice by the Declarant, the Declarant may then proceed with the clean up and collect the cost of doing so from the owner through due process of law not to exclude any applicable lien rights.
DRIVEWAYS:
All driveways must be of asphalt or concrete material extended from the asphalt road a minimum of 20 feet into the Lot and provide a culvert(s) for the purpose of drainage, as approved by the Architectural Control Committee.
MICELLANEOUS STRUCTURES:
No structure of a temporary character, trailer, basement, shack, garage, barn or any other outbuilding shall be used on any lot at any time as a residence, either temporarily or permanently. Provided, however, a trailer may be used on a temporary basis while a home is being constructed on a lot. Provided, however, as indicated herein, said home must be completed within nine (9) months from the beginning of construction.
TRAILERS & MOTORHOMES:
Except as provided for above, the land owners at no time shall keep or permit to be kept on their premises or street area any house trailers, trucks (excluding pick-up trucks of one ton or less), campers, travel trailers, mobile homes, boats or boat trailers, unless housed within a garage or out of sight from the roadway and/or any residences located within the plat.
OFF STREET PARKING / NO PARKING ON ROADWAYS:
All lot owners shall provide for sufficient on-site parking and shall not allow any vehicles, at any time, to be parked on the roadway. Provided, however, that during construction of improvements to said lot, vehicles shall be allowed to park in the roadway during normal business hours but, in no event, shall said vehicles be parked overnight and further, in no event, shall said vehicles obstruct traffic on the roadway.
VEHICLES IN DISREPAIR:
No goods, equipment or vehicle (including buses or trailers of any description) shall be dismantled or repaired outside any building or residential lot. In addition, no owner shall permit any vehicle which is in a state of disrepair to remain parked outside of an enclosed garage upon any lot or upon the street for a period of an excess of forty-eight (48) hours. A vehicle will be deemed in a state of disrepair when it has not been moved for a period of forty-eight (48) hours and is not operable in its then present condition.
ANTENNAS & SERVICE FACILITIES:
All radio or television antennas, clotheslines and other service facilities shall be placed in a location, on each lot, so as not to offend the owners of any other lot within the Plat of XYZ. Without limitation, no visible radio or television antenna shall be placed upon any lot exceeding a height of twenty (20) feet. All exposed fireplaces shall be of brick or quarry stone material or the same as the exterior and specifically not cement block.
BUSINESS & COMMERCIAL USE:
No visible or audible trade, craft, business, profession, commercial or similar activity of any kind shall be conducted on any lot nor shall any goods, construction equipment, materials or supplies used in connection with any trade, service or business be placed outside on any lot at any time excepting the right of any home builder and the Declarant to construct residences on any lot and to store construction equipment on said lots in the normal course of construction.
OFFENSIVE ACTIVITIES:
No noxious or offensive activity shall be carried on upon any lot nor shall anything be done thereon which may be or may become an annoyance or nuisance to the neighborhood. Further, no lot shall be used in a fashion which unreasonably interferes with the other lot owners' right to the use and enjoyment of their respective properties (lots).
RUBBISH & TRASH:
No Lot shall be used or maintained as a dumping ground for rubbish, debris, salvage, garbage, trash, equipment, cars, vehicles or other waste; trash, garbage or other waste shall not be kept except in sanitary containers. No yard rakings such as rocks, roots, dead grass and other materials accumulated as a result of landscaping shall be dumped on any other Lot or streets. The proper removal and disposal of all such materials shall be the sole responsibility of individual lot owners.
DOMESTICATED ANIMALS:
No animals shall be raised, bred, kept or maintained on any lot for any commercial purpose. Further, it shall be unlawful for the Owner or custodian of any dog, cat, and/or any other domestic animal, including without limitation, any fowl, to cause, permit or allow such animal to roam, run, stray or be away from the premises of such Owner or custodian and to be on any public place or any public property or the private property of another Owner, unless such animal, while away from such premises, is controlled and/or adequately supervised by its Owner or other competent person. Any animal found roaming, running, straying or being away from such premises, as herein provided, will and is hereby declared to be a nuisance and such animal may be ceased and impounded pursuant to the applicable ordinance of _____________ County and/or any other public municipality that might annex the property including the plat of XYZ.
SIGNAGE:
No sign of any kind shall be displayed to the public view on any lot except one professional sign of not more than one square foot, one sign of not more than five square feet advertising the property for sale, or signs used by a builder to advertise the property during the construction and sales period.
NATIVE GROWTH PROTECTION AREAS:
All Native Growth Protection Areas shall be left in a substantially natural state. No clearing, grading, filling, building construction or placement or road construction of any kind shall occur within these areas; provided that individual lot lines may be fenced by property owners, subject to the use restrictions and/or these covenants and restrictions, and provided that underground utility lines and drainage discharge swales may cross such areas utilizing the shortest alignment possible if, and only if, no reasonable and/or feasible alignment is available which would avoid such a crossing.
TREE/SHRUB VIEW PRESERVATION:
The preservation of the territorial views from each lot is paramount. Accordingly, in order to preserve the view from each lot, no trees, planted by any homeowner and/or his or her predecessor in interest, shall be placed or allowed to grow so as to restrict the view from any residence located within the Plat of XYZ. Each lot owner shall be required to remove and/or trim any tree and/or shrub that unreasonably restricts the view from any residence located within the plat of XYZ.
EXISTING TREES AND SHRUBS:
In order to ensure that the view from each lot is preserved, and in that existing trees and/or shrubs will continue to grow, an Owner of any lot within the plat of XYZ, at his sole expense, shall have the right to request that an Owner of any other lot trim or top any tree and/or trees and/or shrubs that were existing as of the date this Declaration is placed of record or that was/were established thereafter by "natural vegetation" in the event said tree(s) and/or shrub(s) is/are unreasonably and adversely affecting the view from his/her lot.
VIEW PROTECTION:
Pursuant to the foregoing, the owner (hereinafter referred to as the "requesting owner") of a lot shall have the right, at any time, at his/her sole expense to request an owner of any other lot and/or portion of any other lot, to trim and/or top a tree(s) and/or shrub that unreasonably and adversely affects the view from his/her lot lying within the Plat of XYZ.
The requesting owner shall be responsible for all costs involved in trimming and/or topping and/or if requested as described hereinafter, removing such tree(s) and/or shrub(s). The requesting owner shall be required to contract with a contractor that is bonded and licensed, as applicable, with the State of ______________. Further, the requesting Owner, shall, before its contractor commences with its work, provide the owner of the lot from which the tree(s) and/or shrub(s) will be trimmed, topped and/or removed, with a written report describing, in detail, exactly what will be done.
In addition, the rights of the requesting owner, as described above, shall be subject to the following rights of the owner of the lot from which the tree(s) and/or shrub(s) shall be trimmed, topped and/or removed namely:
The owner of said lot shall have the absolute right to require the tree(s) and/or shrub(s) that is to be trimmed and/or topped to be felled by the requesting owner's contractor;
The owner of said lot shall have the absolute right to retain, at no cost, any tree and/or portion of the same topped, trimmed and/or felled.
The contractor hired by the requesting owner shall be required to clean all debris, except that which the owner requests to be left, from the owner's real property.
As indicated, the intent of this subsection is to preclude the unreasonable obstruction of a territorial view and therefore a tree(s) shall not be topped if by trimming or limbing the view can be maintained. Further, should the parties not be able to agree to the extent of the topping and/or trimming, then, in that event, as reflected above, the matter will be submitted to a designated arbitrator as described above.
MAINTENANCE OF STRUCTURES & GROUNDS:
Each owner shall maintain his lot and residence thereon in a clean and attractive condition, in good repair and in such a fashion as not to create a fire hazard.
SAFETY:
No firearms of any kind shall be used within the property except by appropriate government officials. Muffled, licensed motorcycles shall be permitted on the property and roadways except trails, therein. Muffled trailbikes, snowmobiles and similar vehicles are permitted within the boundaries of the individual lots. Non-muffled motorcycles, motorbikes, trailbikes, snowmobiles or similar vehicles are prohibited on any portion of the property whether licensed or unlicensed.
COMPLIANCE WITH LAWS:
Notwithstanding anything stated herein, each lot owner(s) shall be responsible for compliance with all applicable federal, state, county and/or governmental statutes, ordinances and regulations, and any amendments thereto relating in any way to the ownership and/or improvement of the lots within the Plat of XYZ.
ARCHITECTURAL STANDARDS:
A.C.C. CONTROL:
Subject to applicable laws:
The Declarant, until 100% of the Lots of the Plat of XYZ (including without limitation and Lots created by any further subdivision of Lot __), are sold, shall be considered the Architectural Control Committee and therefore shall have the authority and standing, on behalf of all owners of Lots within the Plat of XYZ, to enforce, pursuant to the provisions of enforcement, any decisions it makes as said Architectural Control Committee.
TERM OF DECLARANT & TURNOVER:
The Declarant, by and through its designee shall perform the functions of the A.C.C. as herein described. The Declarant shall retain this right until, as indicated, 100% of the Lots are conveyed and building plans are approved, or until it surrenders this right prior to that time, in a written instrument in recordable form. Upon the termination or expiration of the right of Declarant to act as the A.C.C., the owners of the Lots in the Plat of XYZ shall have the right to create a committee, to continue with the enforcement of the Covenants, herein stated, if they so desire. Any decision to continue with an A.C.C. shall be made at either the annual or special meeting called for by and pursuant to the terms and conditions of the Road Maintenance Agreement and shall be evidenced by the approval, at such meeting, of 51% of the owners of Lots of the Plat of XYZ.
NEW CONSTRUCTION:
No structure shall be erected, placed or altered on any Lot within the Plat of XYZ until the building plans, with respect to the exterior materials and specifications, including without limitation, color, has been approved in writing by the A.C.C, as to the quality of materials, including, without limitation, color, harmony of exterior design with existing structures and, in addition, as to the location of the structure(s) on the Lot with respect to topography and finished grade elevation as well as with respect to the buildings on adjoining Lots. All locations and elevations shall be given complete consideration by the A.C.C, with regard to their effect upon the maintenance of the view and the property values of adjacent properties before final approval.
APPLICATION FOR APPROVAL:
All applications to the A.C.C. for approval shall be in writing and shall be supplemented by such supporting data as the A.C.C. shall require. The A.C.C.'s approval or disapproval shall be in writing. Submittals by the property owners shall include, at a minimum, a plot plan, drawn to scale, reflecting the location of any and all structures within the Lot and further all elevations. In addition, such application shall specifically, at a minimum, list the type of exterior materials, including, without limitation, siding and roofing materials, as well as color schemes to be used in constructing the new structures as well as any renovations to the same. Further, said application shall include specifications relating to any fencing the lot owner intends to construct.
In the event the A.C.C. fails to approve or disapprove within thirty (30) days after the receipt of any application or supplemental material requested by the A.C.C., approval will not be required and this Covenant shall be deemed to have been fully complied with unless prior to the completion of the building thereof: 1) the Lot owner has failed to comply with the plans, specifications, including without limitation, the location of any structure, as submitted to the A.C.C.; or 2) arbitration has been requested to enforce these covenants.
A.C.C. CONTACT:
The applications, referenced above, shall be submitted to the A.C.C. in care of Mr. ________, Title_____, Company ________, Address_____________________________, or such other address as the A.C.C. may designate in writing to all Lot owners of Lots within the Plat of XYZ. The application shall include, without limitation, the mailing address at which said Lot owner can be notified of the A.C.C.'s decision.
NON-PROTEST COVENANT / FUTURE DEVELOPMENT:
With the exception of the Lot designated as Lot __, the Lots developed and/or created within the Plat of XYZ consist of five (5) acres or greater. Lot __ consists of acreage which Declarant intends, at some time in the future, to subdivide. The owners of lots in Plat XYZ shall take ownership subject to the Right of Declarant and/or its successors and/or assigns to further subdivide Lot __ pursuant to the applicable rules, ordinances and/or regulations of the governmental entity regulating the development of the same. Accordingly, no lot owner shall have the right to protest and/or object to the Declarant, its successors and assigns, efforts to subdivide said real property so long as said subdivision is being requested and/or completed consistent with the rules and regulations of ___________ County and/or any other municipality that might annex and/or gain control of said area.
ADJACENT PROPERTY:
In addition to the foregoing, no person or entity holding fee simple title to any lot within the Plat of XYZ shall protest the development of any property, presently owned or hereinafter acquired by the Declarant, its successors and/or assigns, within a ten (10) mile radius of the Plat of XYZ. This includes, without limitation, real estate presently owned by the Declarant which is being developed under ____________ County File Number ______________. Provided, however, the foregoing covenant shall be effective only so long as the Declarant, its successors and assigns, efforts to subdivide said real property is being requested and/or completed consistent with the rules, ordinances and regulations of the governmental body regulating and/or governing said development.
EXECUTION:
DATED this ____ day of ________________
BY _______________________, DECLARANT
TITLE _______________________________________
(NOTARIZE PER STATE LAW AND RECORD IN COUNTY)
