Just because there is no HOA, doesn't mean there are no covenants.
Inspired by a post by Jeff Pearl today, I remembered a very interesting transaction from a few years ago.
The buyer was looking for a property in the Randallstown, Owings Mills, Pikesville area of Baltimore County MD. The price range was about $350,000 with 4 plus bedrooms and 2 plus baths on the main level (rambler). Not a problem?? The buyer also planned to use the home for an elderly adult day care center. Still no problem. There were over 400 properties in the community with about 15 for sale and many were suitable for her needs, price range, etc. Plus, there was NO HOA, another requirement. Actually, since this was a 40-50 year old community, an HOA would have been very unusual.
We found what looked like the perfect property for sale. The contract was quickly negotiated and accepted by buyer and seller. There was no home inspection because the buyer intended to do a total remodel (no basement foundation).
Get ready for settlement.
Wait! Just one more thing. Something I learned by experience taught me that not all restrictions for construction, use,
etc. are in HOA docs. What about the deed?
So, I contacted the listing agent and requested a copy of the owner's deed. She obliged and sent it to me the next day. Saved me a trip to the county land records.
TROUBLE. There was a covenant in the deed that said, in so many words that there would be no child day care centers, no adult care centers, day or residential, etc. It was very specific.
Back to the drawing board. When I have specific questions about property use, I visit the county permitting office (any county). The folks at those offices are always knowledgeable and extremely helpful. What I found was that, while there was a restrictive covent in the deed, without an ACTIVE HOA or community group, etc., the restrictions were only enforceable for 25 years. Our home was over 40 years old.
Get ready for settlement.
Experience in deed restrictions, Lenn? Yes indeed. When you sell a building lot in my area, it's a good idea to review the seller/owners records. Information is also often available for lots in small 3-25 lot developments. There may be NO HOA, but there are usually covenants incorporated in the deed by the developer. I sold a lot in Howard County a while ago that had covents for setbacks in addition to county requirements, minimum square feet for homes to be built, outbuildings, etc., etc. Most counties require that the developer subdividing a property file the covenants, deed restrictions, etc. when they apply for a development permit.
JUST BE CAREFUL FOLKS. It's better to have a little useless information than to be ignorant of essential information to represent buyers or sellers.
Courtesy, Lenn Harley, Broker, Homefinders.com, 800-711-7988, serving home buyers in Maryland and Northern Virginia.
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