Deed Restrictions in Commercial Property Sales: What You Need to Know

Buying or selling commercial property is rarely straightforward. Beyond the purchase price and location, one of the most important factors that can affect the value and use of the property is deed restrictions. These are legal limitations written into the deed itself that can shape how the property is developed, operated, or even resold.

If you’re an investor, business owner, or developer in Florida, understanding deed restrictions before closing a deal is critical. Let’s break down what they are, why they matter, and how to protect yourself.

What Are Deed Restrictions in Commercial Real Estate?

A deed restriction is a binding condition written into a property deed that limits how the property can be used. In the commercial setting, deed restrictions often:

• Limit what type of business can operate on the property (e.g., prohibiting a competing business).
• Control building height, design, or aesthetics.
• Restrict future property sales to certain buyers.
• Require approval from a developer, association, or another party before certain changes are made.

Unlike zoning laws, which are imposed by local governments, deed restrictions are private agreements that “run with the land.” That means they bind not only the current owner but also future owners.

Common Examples of Commercial Deed Restrictions

If you’re involved in a property sale, here are some of the restrictions you might encounter:

• Non-Compete Clauses: For example, a shopping plaza owner may prevent another property on the block from leasing to a competing grocery store.
• Use Limitations: A property might be restricted to retail use only, blocking office or industrial uses.
• Architectural Requirements: Developers sometimes impose strict design requirements to maintain a uniform look.
• Environmental or Conservation Rules: In some cases, landowners restrict development to preserve green space or wetlands.

These restrictions can either protect the value of a development, or severely limit a buyer’s plans.

How Deed Restrictions Affect Commercial Property Value

Deed restrictions can have a direct impact on what your property is worth and how you can use it:

• Reduced Flexibility: If you’re prevented from leasing to certain businesses, your pool of tenants shrinks.
• Controlled Competition: Restrictions can work in your favor by preventing competitors from moving in nearby.
• Financing Challenges: Lenders often scrutinize deed restrictions to ensure they don’t undermine repayment ability.
• Resale Complications: A buyer may walk away if the restrictions don’t align with their plans.

Because of this, deed restrictions are not just legal fine print, they can make or break a commercial deal.

Can Deed Restrictions Be Removed or Changed?

Yes, but it’s not always easy. Options may include:

• Negotiating with the original party who imposed the restriction (such as a developer or HOA).
• Challenging the restriction in court, especially if it’s vague, outdated, or unenforceable under current law.
• Waiting for the restriction to expire, since some have time limits written in.

In Florida, courts generally uphold deed restrictions if they’re clear and properly recorded. That’s why it’s essential to have an attorney review the deed before you commit to a purchase.

Why Legal Review Is Essential in Florida Commercial Property Sales

Too often, buyers only discover restrictive covenants after closing, and by then, it’s too late. At our firm, we regularly advise clients on:

• Reviewing deeds and title documents for hidden restrictions.
• Negotiating modifications to restrictions during a sale.
• Litigating disputes when deed restrictions are unfairly applied or enforced.
• Structuring deals to avoid being blindsided down the road.

Final Thoughts

If you’re buying or selling commercial property in Florida, deed restrictions should never be an afterthought. They can protect your investment or trap you in costly litigation.

At Ayala Law, we help business owners, investors, and developers navigate the complexities of real estate transactions with a sharp focus on protecting long-term interests.

For legal guidance on your commercial property deal, contact one of our experienced real estate attorneys at 305-570-2208. 

You can also email our founding attorney, Eduardo A. Maura, directly at eduardo@ayalalawpa.com or schedule a case evaluation online here.

[The opinions in this blog are not intended to be legal advice. You should consult with an attorney about the particulars of your case.]