Understanding Discriminatory Restrictive Covenants

September 30, 2022

Restrictive covenants regulate the ownership or use of property and are common in real estate agreements. In the past, they have been abused to promote segregation, but this practice has been outlawed. Here is what you need to know about discriminatory restrictive covenants.

Row of homes on a residential street

What is a restrictive covenant?

Restrictive covenants are provisions in a deed, mortgage or other official housing document that regulate the ownership or use of a property. These can be used for a variety of purposes — from regulating the type of buildings allowed to dictating approved uses for the land.

What is a discriminatory restrictive covenant?

Discriminatory restrictive covenants are provisions that prohibit ownership, occupancy or use of land on a prohibited basis, such as race, color, national origin, religion, sex (including gender identity and sexual orientation), family status, disability or other protected classes.

Are restrictive covenants legal?

Yes, restrictive covenants are legal so long as they are used for a lawful purpose. Discriminatory restrictive covenants are generally illegal and unenforceable.

The Supreme Court’s 1948 decision in the case of Shelley v. Kramer established that restrictive covenants based on race are unenforceable, and the Fair Housing Act of 1968 outlawed discriminatory restrictive covenants based on race and other protected classes.

Do discriminatory restrictive covenants still exist?

Current deeds and mortgages generally do not include discriminatory restrictive covenants, though it is not uncommon to find them in a historical search of property records — especially for properties that date back to the 1960s or earlier.

What if my property has a discriminatory restrictive covenant?

If you notice a potentially discriminatory restrictive covenant in your housing documents, you should consult an attorney to obtain legal advice on how best to proceed.

More information on discriminatory restrictive covenants is available on Freddie Mac’s website.

My Home in your inbox

Sign up to receive resources, tools and tips about buying, owning, refinancing, selling and renting a home in your inbox.