A deed restriction that prohibits commercial use in a residential subdivision is an example of:
Correct Answer
D) A covenant or restriction
Why this is correct: A deed restriction is a private agreement (a covenant) that imposes limitations on the use of the land, recorded with the deed and binding on future owners. A prohibition on commercial use in a residential subdivision is a classic example of a restrictive covenant, often part of CC&Rs (Covenants, Conditions, and Restrictions). Why the other choices are wrong: "An encroachment on the lot" is a physical intrusion of a structure from a neighboring property. "A zoning variance granted" is a government-approved exception to a zoning ordinance, not a private deed restriction. "An easement over the land" grants a right to use the property (like for access), not to restrict its use. Exam tip: Deed restrictions are private; zoning is public. A property can be subject to both, and the more restrictive rule applies.
Why This Is the Correct Answer
A deed restriction prohibiting commercial use is a classic example of a covenant, condition, and restriction (CC&R). CC&Rs are private contractual restrictions that control how property can be used, and they are recorded in deeds to run with the land. These restrictions are created by developers or property owners to maintain neighborhood standards and property values. The prohibition of commercial use in a residential subdivision is a typical CC&R designed to preserve the residential character of the area.
Why the Other Options Are Wrong
CC&R = Contract Controls & Restrictions
Remember 'CC&R = Contract Controls & Restrictions' - when you see deed restrictions controlling land use, think of CC&Rs as private contracts that control and restrict what owners can do with their property.
How to use: When you see a question about deed restrictions or private limitations on property use, immediately think 'Contract Controls & Restrictions' and select CC&R as the answer.
Exam Tip
Look for key phrases like 'deed restriction,' 'subdivision restrictions,' or 'private restrictions' - these almost always point to CC&Rs, not zoning or easements.
Common Mistakes to Avoid
- -Confusing CC&Rs with zoning ordinances (public vs. private restrictions)
- -Thinking easements restrict the property owner's use rather than granting rights to others
- -Assuming all land use restrictions come from government rather than private agreements
Concept Deep Dive
Analysis
This question tests understanding of private land use restrictions versus public regulations and physical property issues. CC&Rs are private contractual agreements that create binding restrictions on property use, typically established by developers to maintain property values and neighborhood character. These restrictions are recorded in property deeds and run with the land, meaning they bind all current and future owners regardless of ownership changes. CC&Rs can be more restrictive than public zoning laws and are enforceable through civil litigation between property owners.
Background Knowledge
Appraisers must understand the difference between private restrictions (CC&Rs) and public regulations (zoning), as both affect property value and highest and best use analysis. CC&Rs are contractual agreements between private parties that can be more restrictive than zoning and are enforceable through civil courts rather than government enforcement.
Real-World Application
When appraising properties in planned developments or subdivisions, appraisers must review CC&Rs to understand use limitations that affect highest and best use analysis and comparable property selection, as these restrictions can significantly impact property values.
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