Deed Restriction vs Covenant

[Vlaude]

I am interested in hearing from someone who has dealt with the two and knows the advantage of using one over the other... In one case I am thinking about using a Covenant on the plat for commercial shared parking... And using a deed restriction for the selling of two lots together...

In some cases I could see where either could be used to address the same issue... Advantages to one over the other? Thanks I appreciate any feedback...

 

[Cardinal]

I would generally use a covenant to create standards in a district, such as a business park or a residential subdivision. For shared parking between two lots, I would tend to use an easement.

Is this a case where the person wants to build on one lot and put parking on the other, or are there two lots, each with its own structure, and shared parking on both sides of the lot line? In the first case, why not require the lots to be combined? In the second case, an easement should cover it, without imposing the difficult restriction of having to sell both lots together.

 

[Chet]

That questions struck me as odd. I know there can be substantive differences betweent the two, but everyone always titles their documents 'covenants and restrictions' .

I think Stumpf is right in his assessment.

 

[Vlaude]

Its an odd situation... I have never seen or used a deed restriction in the way proposed but I don't see why it wouldn't work. 1 lot divided technically into two lots. Say Lot 1(A) and Lot 1(B) as it is recorded on the plat. The two lots are sold together 1(A) has the frontage but is in a 100 yr flood plain. Lot 1(B) is outside the 100yr flood plain but does not have frontage. So for financing and legalities, the building is contructed on a lot completely outside the flood plain and through Lot 1(B) has frontage. The restriction would require the lot be sold together in any sale....

Second the Covenant question is in regards to a preliminary plat. The lots will not provide adequate parking however when combined the lots would meet current standards. The city ord. allows for such shared parking, however it does not set a way to ensure the joint use in the future. (I personally don't like the idea of one larger lot giving up building space so that the other lots will have adequate parking, puts the burden on the owner of the larger lot and limits expansion. I'd rather see the lots have more uniformtiy in size.) But I guess any future owner would be aware of the covenant up front if its recorded on the plat??? And futhermore the maintenance issue??? I want to see this taken care of upfront so its not an issue of whose responsible later... I'm guessing a covenant on the plat is the best way to handle this???

 

[Queen B]

I guess I question why it would have to be split for flooding financial reasons. If it is built out of the floodplain then it is out and would not require flood insurance. It shouldn't need to be split for that reason.

 

[SW MI Planner]

Is this only in the plat stages? From what I understand, you have two proposed parcels, that you want to essentially treat as one, because of frontage, flood plain and parking. So basically they are proposing two technically unbuildable lots (for whatever reason).

Can't you just require them to 'combine' the two of them as one parcel, and approve it as such?

((maybe I am not understanding the situation though))

 

[Cardinal]

A division fitting your scenario would not be permitted here, where every newly created lot in a subdivision must have frontage. I agree with Queen B, flood insurance should not be affected by a portion of the lot being in a floodplain, provided any improvements remain outside of the flood zone. I would require a detailed survey of the flood elevation and a notation on the plat, but would recommend proceeding as a single lot.

 

[Chet]

I agree with Queen B, flood insurance should not be affected by a portion of the lot being in a floodplain, provided any improvements remain outside of the flood zone.

I agree with the both of you, but I have seen this vary from lender to lender (especially nation wide mortgage companies like Countrywide) Without local knowledge, they presume the worst.

 

[Vlaude]

Yes the lot 1(a) and 1(b) is essentially one lot. But it makes a huge difference in financing the lot if it is within the 100 year flood plain. Insuring is a different issue... The City is doing the preliminary plat on this project. And the City Staff Engineer proposed this. I don't see a problem with this if the lots are guaranteed to be sold together or R.O.W. is obtained for the back lot. The lot in the flood plane will of course never be developed unless built up, which probably will not happen... Some serious issues with it and it is not feasible to do. I guess my question is how could this be addressed as a covenant on the plat???

I agree 100% about a lot not having frontage, I've discussed that already, but lost that arguement... So now I'm curious as to how to approach insuring the lots are sold together...

 

[Cardinal]

I don't understand why the financing would be any different, and I have done several developments where the property was partially in a floodplain - one even below a dam. None of the banks or other lenders ever raised the issue. I might be tempted to press this one - require a statement from the lender, and consult a few others independently.

Too bad you lost the argument on frontage. It is right in the subdivision ordinance here, and there is no debating it. Of course, that would clearly be the best way to handle the problem. If you can't fight 1) the question of whether it is really necessary for financing purposes or 2) the creation of a lot without frontage, then I suppose the next fall-back position would be a combination of deed restriction and notation on the CSM or plat of survey. I might try to throw some other safeguards in there as well, but that would require more knowledge of the project, so I can't offer any.

 

[Chet]

Outlot?

In these parts, an outlot is my definition unbuildable. Perhaps it can be platted as an outlot and noted to be required to be in common ownership with parcel #X.

We have done plat restrictions similar to that on plats where a navigable stream bisects a single property (our attorney general ruled that streams create land divisions which must be acknowledged on the plat. wierd, I know).

 

[Vlaude]

Thanks Chet, would you mind elaborating on that? Sounds like a similar situation to this. Would dividing this lot in 1(A) and 1(B) with the deed restriction / covenant on the plat be that same as an outlot? It sounds very similar???

M. Stumpf thanks I will push the issue and see about the financing aspects of this. I have heard of similar issues, but I do not have experience with developments around and within a 100 yr flood plain...

Thanks again everyone...

 

[Chet]

Thanks Chet, would you mind elaborating on that? Sounds like a similar situation to this. Would dividing this lot in 1(A) and 1(B) with the deed restriction / covenant on the plat be that same as an outlot? It sounds very similar???

I have your yahoo email address from your Cyburbia registration, I'll send you a PDF scan of one we did. If you want it sent to a different email, PM me with your preferred email.

 

[Chet]

Vlaude - your Cyburbai registered Yahoo acccount wouldnt accept my email with 2,058 KB attachment. PM with another account if possible.

 

[SGB]

An additional thought

From my experience, public enforcement of private covenants becomes a royal and legal pain in the a$$. Most municipal attorneys I've worked with recommend against a municipality requiring theme as part of a land use approval.

For this reason, I'm all for requiring consolidating the lots. As long as the building footprint is out of the floodplain, the owners should have no problems.

If they are committed to selling the lots together, consolidation is the "cleanest" route to go, IMO.