Once the parties have agreed upon the price and entered into a written agreement, the earnest money is typically deposited with the brokerage of the listing agent. The earnest money will be held until the transaction closes. At closing, the earnest money will be applied towards the purchase price of the property. However, if the transaction does not close and one of the parties backs out of the deal, then the parties will need to determine which party will receive the earnest money. Determining which party gets to keep the earnest money will depend largely on the language and provisions included in the purchase agreement.

If you have questions regarding earnest money or purchase agreements, the attorneys at Hartung Schroeder can help.

ABOUT TRAVIS BRENNER

Travis is an associate attorney at Hartung Schroeder. His experience includes real estate and family law, civil litigation, and working with clients to form non-profit organizations and businesses. Travis also holds a Master of Business Administration degree, which allows him to better address the needs of business clients. You can read more about Travis or get in touch with him here.

Restrictive covenants, aka property covenants, tell you what you can and cannot do with your property.  Two main purposes of covenants are to limit the misuse of property and maintain property values.  Restrictive covenants are often put in place by land developers who are developing a tract of land into a subdivision of homes.  First, the developer creates a list of covenants that restrict the use of the lots being sold in a particular subdivision, then the developer would file those covenants at the county recorder’s office.  After the covenants are filed, they will remain connected to land until the covenants expire or are terminated. Since the covenants are connected to the land, they will pass from seller to purchaser.

Examples of Restrictive Covenants:

• House Requirements: Covenants may require a minimum square footage or house design, such as a one or two story house.
• Design Approval: Covenants may require any new construction plans, renovations, or other improvements to be reviewed and approved by a committee or HOA prior to being initiated.
• Business Usage: Covenants may prohibit homeowners from operating a business out of their home.
• Pet Restrictions: Covenants may limit the number and type of pets that are allowed on your property.
• Other Restrictions: Covenants may restrict home owners from storing trash in their yard, posting signs or billboards on their property, or parking vehicles on their driveways. Covenants may also require homeowners to mow their lawn every so often or upkeep their landscaping in a particular manner.

This is not an exhaustive list of covenants, and it is important to research the covenants you may be subject to before purchasing a new property.  Overall, covenants are designed to maintain continuity and preserve property values within a particular neighborhood, subdivision, or group of properties.  However, some covenants may prevent you from using your property the way you would like. If you have questions or concerns related to property covenants, an experienced real estate attorney at Hartung Schroeder can help.

ABOUT TRAVIS BRENNER

Travis is an associate attorney at Hartung Schroeder. His experience includes real estate and family law, civil litigation, and working with clients to form non-profit organizations and businesses. Travis also holds a Master of Business Administration degree, which allows him to better address the needs of business clients.