Dealing With Deed Restrictions and Covenants

In addition to zoning, deed restrictions and covenants can be an obstacle to placing a manufactured or modular home.

SC law requires that modular homes must be treated the same as site-built homes in terms of government zoning, but specific developments and neighborhoods can legally exclude modular homes and place other restrictions on the homes that may be placed in the area.

Here are some ideas for dealing with deed restrictions and covenants.

Does the lot actually fall under the restriction?

Many areas have lots that are adjacent to the actual boundaries of the neighborhood. There can even be areas surrounded by a neighborhood that aren’t under the deed restrictions and covenants.

You can usually access neighborhood covenants through the county, sometimes online. The place to start is usually the county Register of Deeds office or the county’s website. A real estate attorney or title company may be able to find the information more quickly.

Is an attorney necessary?

As discussed below, the neighborhood homeowners association may or may not decide to employ an attorney. This is also an option for your homeowner.

Of course, a full-fledged legal battle would be very expensive. But paying an attorney to check out the covenant and write a letter to the HOA telling them the restriction doesn’t apply would be much cheaper and sometimes will be all that’s needed for the HOA to back down. A retailer may even consider making an arrangement with their own attorney to provide some assistance at a set, reasonable fee. (See the discussion of “legal saber rattling” in the Expiration of Covenants section below.)

Exceptions

Some deed restrictions have provisions that allow the members of the HOA or a similar group to approve exceptions to a provision.

This would involve providing attractive photographs of the model, nicely landscaped. As industry professionals know, many manufacturers provide these. Some have only plain Jane photos, but these can be photoshopped or spiffed up via other software.

The idea, of course, is for the HOA board or neighbor pressing the issue to decide that the modular home looks as good as the other homes in the neighborhood — or even a step up.

Changes in the Covenant

Some covenants may have a provision for exceptions; others may not. A harder but doable approach is a change in the restrictions. Ordinarily, the covenant lays out how the rules can be amended, such as by a majority vote of current homeowners.

In some neighborhoods there may be an influential resident or HOA board member who can make things like an exception or change in the covenant happen. If he or she really likes the house, they may be willing to take this step.

MHISC could provide replacement language that would keep out the type of undesirable home they may be envisioning but allow in an attractive, modern-day manufactured home.

At the other end of the spectrum is the type of person who is a fanatic about deed restrictions. Unfortunately, that is also the type of person who seeks election or appointment to an HOA board. Does that sound like the type of person or persons you are dealing with in this case? As you know, these types of people are often retired individuals who miss being a boss, or who never had any power in the first place.

Expiration of Covenants

Many covenants had a provision stating that they expire after a certain number of years if they are not renewed. The covenant can specify how the renewal must be conducted.

It may be time for some legal saber rattling. The retailer or would-be homeowner can challenge whether the renewal was done — or done properly. And can they prove it?

They can say, “Well, we would certainly hate to spend $10,000 to sue you, but circumstances are such that we have no choice. And I know that you would not want to spend that type of money to defend the case. And I believe in a case like this we would have to sue you individually.”

Even if this is a bluff, some neighborhoods or residents will back off. They probably don’t have those types of funds and doubt whether enough neighbors will be willing to chip in substantial money. Plus, nobody likes being sued individually.

If the problem appears to be with one or two stubborn individuals, it may be possible to stymie their fundraising to hire an attorney by distributing nice photos and favorable specs, such as square footage, etc., to everyone in the neighborhood. It’s cheap to print flyers and put them in everybody’s mailbox. You could also hold a meeting for residents to show photos and facts on a screen. You could treat everyone attending to a cost-effective meal. As they say at church, “If you feed them, they will come.”

Of course, I don’t know anything about the homebuyer and their personality or how much incentive CCH has to take these extra steps. But I did want to outline a spectrum of small and larger efforts to work around the covenant provision. If one approach doesn’t work, another might.

A Role for the Staff

This article touches on ways to assuage the concerns of homeowner associations, similar organizations, and cranky neighbors.

Manufactured home managers and salespeople are an underrated resource for the industry in dealing with HOAs and similar organizations. The same goes for working with local government.

The trick, of course, is to wear your salesperson personality. It’s surprising how some managers and salespeople toss diplomacy aside when they are dealing with local officials or situations like this.

A salesperson who can address all a customer’s reservations and questions and sell a $100,000 home has all the people skills of a fine lawyer or successful politician. It’s a huge asset.