Doing Good Deeds
Virginia has had enough. Starting in 2020, its lawmakers barred the recording of deeds with restrictive covenants that offend the Virginia Fair Housing Law. Virginia also supplied a way for owners to formally delete these restrictions from existing deeds.
Virginia has followed the lead of other states, such as Washington, that help property owners remove discriminatory deed restrictions.
Later in 2020, New Jersey introduced a similar bill. By November 2021, New Jersey had enacted its bill, to help ensure that the “hateful and hurtful legacy” of discriminatory deed restrictions “is forever removed from State land deeds.”
Here’s what this means. Restrictive covenants printed on real estate deeds have sometimes kept people from buying, owning, or using real estate, as the New Jersey Legislature explains, “on the basis of race, creed, color, national origin, ancestry, age, marital status, affectional or sexual orientation, familial status, disability, liability for service in the Armed Forces of the United States, nationality, sex, gender identity or expression, or source of lawful income used for rental or mortgage payments.”
Although these discriminatory covenants are already unenforceable, New Jersey’s on a mission to get rid of them entirely.
Milestone Legislation
New Jersey’s governor has signed A-5390/SB-2861 into law. It guides the deletion of discriminatory deed language, aligning real estate ownership and use law with the state’s Law Against Discrimination. The new law also:
- Directs homeowners’ associations to immediately review, and remove offending language from, their governing documents. This applies to co-ops, condo associations, rental properties, and planned communities of all types. If an association’s review unearths any unlawful restriction, covenant, or condition, it must amend the document to take out the problematic text. This required action does not need a vote by the unit owners, even if the governing documents say a vote is required.
- Forbids any register of deeds from recording deeds that do not comply with New Jersey’s Law Against Discrimination. Deeds can still have general statements that they’re subject to covenants of record, but the preparer of the deed must be sure that those covenants are in compliance. If any errors are made, real estate transfers are still good, but now the property owner can have offending language stricken once it comes to light. How? By a formal release of the restriction, recorded in the property’s county. Scroll down through this column to find the state-created template.
Can a property owner initiate action on a noncompliant restriction in New Jersey if the property and master deed is held by an association? The answer is yes. To take action, a member of a homeowners’ association would submit a written request to the board to have the language deleted from the deed or the governing documents. If the unit owner finds language that puts unfair limits on real estate transactions or on the allowed occupancy, renting or other use of real estate, the board must review the language immediately upon receipt of the letter, and finish an assessment within 30 days. The board then has another 30 days to delete the language at issue if it is indeed offensive to New Jersey’s Law Against Discrimination.
Why Laws Enabling the Deletion of Unfair Deed Restrictions Matter
Why are the new Virginia and New Jersey laws so important?
First, is the matter of respect. People have been mortified to come across hurtful language they hadn’t known existed on the deeds of their homes or multi-unit properties. Imagine running a title search and finding language in the documents that forbids people “of any race other than the Caucasian race” (except servants) from carrying out activities on a certain piece of real estate. Such deed restrictions are not only shocking to find; they are also disturbingly common.
Second, there’s a very real practical effect. Say someone wants to buy a home or condo and finds words intended to exclude this very buyer from having the property. The hopeful buyer may understandably decide to look elsewhere — especially if that person isn’t aware or isn’t certain that the exclusion has zero legal effect.
Indeed, discrimination through covenants held up under the law until fairly recently in the history of the United States. In 1948 the U.S. Supreme Court in Shelley v. Kraemer deemed race restrictions in property deeds unconstitutional. Not until the Federal Fair Housing Act was enacted in 1968 were race-based deed restrictions explicitly declared illegal under a federal statute.
☛ The first racially restrictive covenants emerged in the late 19th century, notably in Massachusetts and California. Deed language that kept members of minority groups locked out of developments was common in the 1900s. These exclusion tools used to be valid, and they were enforced. Owners who defied a them could be fined or lose their homes. Learn more about racially restrictive covenants.
New Jersey’s “Certificate of Release of Certain Prohibited Covenants” Template
As noted above, an owner or board can have discriminatory language on a New Jersey property deed removed by recording a Certificate of Release of Certain Prohibited Covenants. This can be done before the deed is conveyed to a new owner, or when the unlawful text becomes noticed and a homeowner wants to file a release.
The legislature published a “Certificate of Release of Certain Prohibited Covenants” template that members of the public may use to delete discriminatory deed restrictions in New Jersey:
CERTIFICATE OF RELEASE OF CERTAIN PROHIBITED COVENANTS
County of Record: ______________
Date of Deed Containing Prohibited Covenant: _______________
Deed Book: ________ Page: _____________
Name(s) of Grantor(s): ____________
Name(s) of Current Owner(s): _________________
Real Property Description: __________________
Brief Description of Prohibited Covenant: _______________
The covenant contained in the above-mentioned deed is released from the above-described real property to the extent that it contains terms purporting to restrict the ownership or use of the property as prohibited in section 4 of P.L.1945, c.169 (C.10:5-4).
The undersigned is/are the legal owners of the property described herein.
Given under my/our hand(s) this ______ day of ____________, 20__.
____________________
____________________
(Current Owners)
State of New Jersey
County of _________
Subscribed, sworn to, and acknowledged before me this _____ day of ___________, 20__.
______________________
Notary Public
Notary Registration Number: __________
My Commission Expires: ______________
Note: A recorder of deeds may not impose any type of fee on the property owner to record the certificate.
Supporting Fair Play in the Housing Market
At Deeds.com we acknowledge our role in encouraging fairness. Thus we strive to explain the history of unfairly restrictive deed language, and the progress of fair play.
Property owners can act as a community. To uphold the integrity of our system of deed recording, we can all review the language in our deeds, and take action to repudiate unlawful restrictions where they are found.
Supporting References
State of New Jersey, 219th Legislature, A-5390/SB-2861: An Act Concerning Discriminatory Restrictive Covenants in Deeds and Supplementing Title 46 of the Revised Statutes.
State of New Jersey, Law Against Discrimination, Sections 10: 5-12.5: Regulation of Land Use, Housing, Unlawful Discrimination.
Michael O’Donnell, et al., Riker Danzig Scherer Hyland & Perretti: Riker Danzig Banking, Title Insurance, and Real Estate Litigation Blog: New Jersey Adopts Legislation Requiring the Removal of Discriminatory Restrictive Covenants in Deeds and Association Documents (Nov. 18, 2021).
Photo credits: Olga Subach, via Unsplash, and Sora Shimazaki via Pexels.