Deed Restrictions Next Door Being Violated

by Lee Bell
(Lincolnton, NC 28092)

Visitor Question: My neighbor and I have the same deed restrictions.

(1) Restrictions say no business is allowed.

However, he operates and they advertise a construction company, and his wife has a beauty shop.

(2) The restrictions say no buildings under 1200 square feet are allowed.

He has brought in two buildings with 400 sq. ft. each, and five sideless tin roof sheds.

I want to sell my property but Realtor says the value is affected by all the commercial activity and illegal buildings and a potential court battle over all these violations.

What can I do?

Editors Comment: This is yet another time when we have to remind readers that we are planners, not attorneys. But we do have quite a bit of experience helping people deal with such everyday neighbor conflicts.

In this case your Realtor is giving you very good advice. The violations of deed restrictions nearby are likely to raise red flags at any stage along the way in sale of your home, providing that the real estate agents and title companies involved are both knowledgeable and ethical.

Even worse, supposing you were to "get by" with selling your home for a good price, the sale flies along briskly and is completed, only to have your buyer discover at some point in the future that the deed restriction violations next door are problems. Then you, your agent, and/or your title company would be vulnerable to being sued. So you are right to be thinking about this now, rather than later.

At this point you should be concerned about gathering some facts, including (a) exact language of the deed restrictions, (b) number and names of others in your area who have the same deed restrictions and who therefore might be willing to join you in the event of a lawsuit or at least threat of a lawsuit, and (c) facts about whether there are any zoning or business license requirements from the local government that are being violated next door.

If a number of others have the same restrictions, invite them over for coffee or dessert and explain the situation, trying to line up others who will share the cost of consulting an attorney with you.

If you are the only one, consider how much you want to sell and how much lower you and your Realtor think your selling price will be, due to this situation. If it is worth it to you, then you will have to hire an attorney.

Since the facts of the situation seem rather straightforward, and it seems rather easy to show these folks actually have constructed buildings and advertised businesses, the first course of action your attorney recommends might be having the attorney write a stern warning letter and giving a deadline for ceasing all business use of the address next door, and for removal of the structures not permitted under the deed restrictions.

The letter of course can point out that these violations of the covenants mean that the neighbors would not be able to sell their house.

In the unlikely event that a threatening letter from an attorney results in the neighbor backing down, then every penny you spent on the attorney will be worthwhile.

It seems more likely though that people who are willing to be this blatant in their disregard for deed restrictions also would try to bully their way out of any challenge to doing exactly what they want to do. At that point you will have to discuss with your attorney the likely legal costs of filing a lawsuit to force compliance, and then figure out how to proceed.

By the way, it is fairly common for people who are caught in some sort of zoning violation or deed restriction violation to just deny it. Before the situation escalates, it would be a good idea to snap a few photos of the offending structures if you can, and also to keep a log of commercial comings and goings that you observe, such as trucks entering or leaving the property, large commercial deliveries, or beauty shop customers arriving and leaving.

After you talk with an attorney, you need to weigh the costs of a lawsuit against the gain when you sell your home. It isn't an easy decision we suspect. Good luck to you.

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