Sellers Now Must Disclose Restrictive Covenants And Deed Restrictions

Based on my experience, the biggest improvement in the new Real Estate Condition Report required by 2017 Wis. Act 338 and Wis. Stat. § 709.03 is the following question:  "Are you aware of restrictive covenants or deed restrictions on the property?"

The closest that the old Real Estate Condition Report came to this question was Property Condition Statement C.26, which read as follows: "I am aware of subdivision homeowners' associations, common areas co-owned with others, zoning violations or nonconforming uses, rights-of-way, easements, or another use of a part of the property by nonowners, other than recorded utility easements."  A seller who was aware of restrictive covenants in his subdivision could honestly answer this statement "No" as long as his subdivision did not have an actual homeowners association.

Contrary to what is popular belief in some quarters, restrictive covenants are enforceable even without a homeowners' association.  Some of these restrictive covenants are written so that any neighborhood bully can sue his neighbor for enjoying an above-ground pool or installing a vinyl fence on his property.  Even worse, some of these restrictive covenants are written so that the neighborhood fascist can seek payment of his attorneys' fees from the poor neighbor that he is suing for having the wrong politician's campaign sign on his lawn or leaving Christmas lights up past New Years Day on his home.

In my opinion, the existence of restrictive covenants in a subdivision is far more worthy of disclosure to buyers than the existence of a homeowners' association.  While homeowners' associations may sue homeowners, they are at least theoretically controlled by the board member election process, Robert's Rules of Order, and group dynamics.  The restrictive covenants themselves are the potentially adverse condition affecting the property, regardless of whether they are enforceable by a homeowners' association or by any of your crazy neighbors.

Please reach out to me at rudolphkuss@stevensandkuss.com if you are being bullied by your neighbor or by your homeowners' association over your use of your property.