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Understanding CC&R’s Before You Buy Land

Understanding CC&R's Before You Buy Land

Today I want to review buying land. If you’re looking to buy land to build a custom home, reviewing any CC&Rs is very important. CC&Rs are Covenants, Conditions and Restrictions of a community, which are restrictions that are put on each lot when the original owner subdivides the community. These can apply to lots that are in the city or the country. The presence of CC&Rs simply depends on whether the seller or owner wanted to enact any restrictions on the property when that subdivision was completed.

CC&R Examples

An owner may not want any manufactured homes next to them. They may not want a certain kind or number of animals on the properties next to them. Perhaps an owner wanted certain size homes nearby, these are examples of what they can dictate in the CC&Rs. If you buy land without researching the CC&Rs, you might have something in mind that you cannot change to your property. The following are some construction examples of what CC&Rs can restrict.

Say you want to build a minimum size home. Many times, CC&Rs will dictate if you are permitted to build a single story or two-story. Additionally, they may require a certain minimum size such as 2200 square feet, 3000 square feet, or any size. If two-story homes are permitted, they may require a minimum size for the first floor as well as dictate the size of the second floor. Sometimes CC&Rs dictate the garage size. Many land buyers want to build a shop or other accessory structures, but these may not be permissible. The CC&Rs may allow or restrict a lot from having Chickens, cattle, horses, or other livestock. When allowed, CC&Rs may provide a quantity of what is allowed on that property. It is imperative to research all these kinds of things inside the CC&Rs.

CC&R During the Due Diligence Period

Once a property goes into escrow, you can request the preliminary title report from the title company. Typically, the report has a hyperlink that links to the CC&Rs that were recorded against the property. You can access that document to review. CC&Rs are typically a lengthy document. That document will explain the restrictions, which will allow you to determine if this property is something that you would want to buy. Not all properties have CC&Rs. They might not exist, but they are important to investigate during the due diligence period. Inspect the property to ensure it is something that you want.

More Information

If you want more information on buying land, we have a brand new how to buy land guide on our website. It has the checklists that we use when buying land. And it also gives a ton of links to all the resources, and a ton of videos that we have done on land to go in more depth on each part of the process. So, all right. I hope that helps. And have an excellent rest of your day.

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