Unlawfully restrictive covenants: housing developments.

Schultz, with coauthors Petrie-Norris and Wicks, advances a measure that broadens the framework for unenforceability of restrictive covenants by extending protections to additional redevelopment contexts and reciprocal easements, while ensuring consistency with state housing laws and local planning. The core change expands the set of covenants that may be modified to render them unenforceable against a housing development to include those in reciprocal easement agreements and other instruments affecting transfer or sale of real property, provided the project involves residential uses permitted by law and the property qualifies as a housing development under the measure’s definitions. It also specifies that these provisions must align with state housing law and local plans, and it creates a state-mandated-local program requiring county participation in the modification process.

The measure establishes a multi-step modification process tied to an approved restrictive covenant modification document, with concrete procedural steps and timelines. An owner of a housing development may submit the modification document along with the original covenant and any required notices, and the county recorder must forward these materials to the county counsel for review within five business days. County counsel has a defined window—up to 15 days—to determine whether the original covenant contains a prohibited restriction, whether the property qualifies as a housing development, and whether the modification may be recorded. If authorized, the modification may be recorded, and the owner must notify interested parties, with an option to publish notice. The modification must be indexed referencing the original covenant, and its effective date aligns with the original covenant unless modified. The measure also provides that a modification recorded in error imposes liability on the owner rather than the county. In enforcement or challenge actions, a 35‑day window applies after notice, and a prevailing party may recover litigation costs incurred after the modification’s recording. The scope remains limited to covenants that restrict residential uses or the number, size, or location of residences, excluding purely aesthetic design standards, maintenance charges, or rent limitations, and certain conservation easements and state‑imposed requirements are carved out from applicability. Definitions clarify terms for housing development, ownership, and modification documents, and the measure maintains protections against discrimination and alignment with local planning requirements.

From a broader vantage point, the measure situates its reforms within a policy context that aims to facilitate housing development while preserving legal protections and local governance standards. It creates a state‑mandated local program, with local agencies able to levy service charges to fund the added duties, and explicitly states that no state reimbursement is required. Stakeholders—developers and owners, county recorders and counsels, conservation easement holders, and local planning authorities—are positioned to interact through new notice, review, and recordation responsibilities, along with defined timelines and potential litigation costs. Transitional exclusions for certain conservation arrangements and pre/post‑2022 agreements help delineate scope, while the measure remains anchored to the principle that modifications must be consistent with state housing laws and local general plans and zoning.