A recent update to the Real Estate Condition Report (RECR) and the Vacant Land Disclosure Report (VLDR) includes new clarifying language regarding restrictive covenants and deed restrictions. This language has been added to Question F7. in the RECR and Question E7. in the VLDR.
When property owners hear terms like “covenants” or “restrictions,” they often think of common examples such as shared driveways, homeowners association rules, rental limitations or pet restrictions. However, the updated language highlights that covenants and deed restrictions may take many other forms.
The revisions clarify that restrictive covenants or deed conditions may include resale price limitations, occupancy requirements, or other restrictions that apply for a specified period of time. The updated reports also include an example referencing properties that may be subject to such restrictions, including those associated with certain affordable housing programs.
While these updates do not change the overall substance of the disclosure reports, they serve as an important reminder for sellers to carefully review any restrictions that may affect their property. In some cases — such as properties connected to affordable housing initiatives — covenants may be in place to preserve long-term affordability or maintain eligibility for certain programs.
These changes apply prospectively only. Neither sellers nor licensees need to take any action with respect to RECRs or VLDRs that have already been completed. The updated language will appear in newly completed reports going forward.
As a result, both sellers and buyers should take care to identify and understand any applicable restrictions early in the transaction process. Being aware of these limitations helps ensure compliance and avoids unintended issues related to use, resale or program eligibility.
So what changed?
Old questions F7. (RECR) and E7. (VLDR)
“Are you aware of restrictive covenants or deed restrictions on the property?”
New questions F7. (RECR) and E7. (VLDR)
“Are you aware of restrictive covenants or deed restrictions on the property?
A restrictive covenant or deed restriction may include a provision that imposes resale price limits, occupancy requirements, or other restrictions for a specific period of time (e.g., a development that received Infrastructure Access or Vacancy-to-Vitality funds from the Wisconsin Housing and Economic Development Authority (WHEDA). For more information, visit https://www.wheda.com.)”
The updated forms are available for WRA members in the WRA Forms Library and Transactions (zipForm Edition).
