Reading recorded easements and restrictive covenants on a Michigan self-directed IRA property

The deed to a West Michigan property often carries rights and promises that never appear in the photos: a shared driveway over the neighbor's lot, a utility line under the front yard, a covenant that says the parcel may be used only as a single-family residence. None of that shows up in the listing. It shows up later, in the recorded documents behind the title, and it can change what the property is actually good for.

For a self-directed IRA, that question lands in two places. On the property side, an easement or covenant can grant the account a right it is counting on, or it can limit the use it intended, in ways that are easy to miss when the language is old or the description is short. On the account side, every payment, agreement, or modification tied to those rights has to move through the custodian without giving the owner a personal benefit or a personal signature. A parcel that looks clean in the yard can still carry a recorded strip of someone else's driveway across the building pad, and that is worth finding out while the offer is still open.

Easements and covenants are two different things

They are often filed together and sometimes confused, but they point in different directions. An easement is a right that one piece of land, the dominant estate, holds to use another piece of land, the servient estate, usually a strip across it. A restrictive covenant, often bundled into the covenants, conditions, and restrictions of a platted subdivision, is a promise about how the owner may use the owner's own land. One grants a use. The other limits one. Reading them the same way is where most mistakes start.

Where the title work already points to them

The first clue is usually on the title commitment, not in the deed. The commitment's schedule of exceptions is where easements, restrictions, and similar matters are flagged, and the title-commitment article on this site covers how to read that document. The important next step here is to pull the actual recorded instrument behind each flag: the deed that grants the easement, the subdivision plat or recorded covenant that creates the restriction, and any amendments, releases, or extensions that follow them. A one-line reference on the commitment is not the answer. The recorded text is.

Michigan is a recording jurisdiction, and the recording statutes are why the recorded document is the document. Michigan Compiled Laws section 565.29 addresses the effect of an unrecorded conveyance against a later good-faith purchaser whose conveyance is first duly recorded, and section 565.201 lists what an instrument must meet to be accepted for recording. Those rules do not decide a particular dispute, but they explain the underlying principle: what is recorded, properly delivered, and in the required form carries weight against later buyers, and what is left unrecorded or informal is where the risk lives.

Read the four corners of the instrument

Once the recorded document is in hand, read it the way a title professional would, corner to corner, rather than skimming for the words that sound bad.

• Identify the grantor and grantee, and confirm they line up with the parcel's ownership chain and the parties on the title commitment
• Find the metes-and-bounds description, plat reference, or map exhibit that defines exactly which strip or which parcels are affected
• Read the scope of the right or restriction: what use is granted or limited, and whether it is specific to a purpose or general
• Note who benefits, whether the right or duty transfers with the land, and whether it is intended to bind successors
• Look for the practical limits: hours, maintenance duties, repair responsibility, fees, and any condition that narrows the right
• Flag anything the exhibit or a later document does not resolve, because that is what the surveyor or the buyer's attorney will have to answer

The map exhibit is not decoration. It is the difference between a five-foot utility strip along the property line and a shared access road that crosses the center of the lot. When the description and the map disagree, that is a question for the surveyor and the attorney, not a detail to gloss over.

Connect the record to the intended use

The reason to read the instrument at all is that the account has an intended use for the property, and the recorded rights either support it or limit it. A covenant document may limit a parcel to single-family residential use, which changes what a multi-family or a commercial plan would require. It may restrict or regulate renting, may limit the size or placement of a structure, or may require approval from an association before a change is made. The zoning and rental-certification articles on this site cover the local ordinances; this one is about the private, recorded restrictions that sit on top of them and can be stricter.

For an access easement, the practical question is whether it actually reaches the account's parcel and reaches a public or usable road, and whether maintenance is assigned to anyone at all. That is where the boundary-survey article fits in: the surveyor can put the recorded easement on the ground and show whether the strip is where the documents claim it is. A recorded easement that is vague, ambiguous, or missing from the chain is a risk the survey and the title work are there to surface.

How a recorded restriction can change the numbers

None of this is about a single red flag. It is about the cumulative effect. If a covenant limits the parcel to one dwelling and the account was counting on more than that, the plan has to be rebuilt around one unit. If an access easement is disputed or does not reach the road, the parcel may need a recorded right of way that a neighbor must grant, or the purchase may need a different structure. If a subdivision association carries a maintenance or architectural-approval role, that is an ongoing cost and a process the account has to fit, not a one-time closing item.

Do not offset a known restriction, an uncertain easement, or a maintenance obligation against assumed rent, occupancy, appreciation, or a future buyer. None of those results is guaranteed, and none of them pays for a recorded obligation the account will inherit at closing. The same caution applies to time: confirming a covenant's terms, resolving an ambiguous easement, or getting an association approval all take weeks, and the purchase contract should give the account's advisors real time to finish before the contingency dates close.

Keep the obligations inside the account's process

Whatever the documents say, the obligations belong to the account. If the IRA takes title subject to an easement or covenant, the maintenance payments, association fees, and any recorded modification or release are account expenses that move through the custodian, not personal charges the owner settles from a personal account. The owner does not sign a covenant amendment in a personal name, does not perform the maintenance with personal labor, and does not use the servient strip for a personal project. IRS Pub 590 and the prohibited-transaction rules are what keep a personal arrangement from becoming a problem for the whole account, and the custodian should confirm how the account handles each payment, agreement, and recorded document.

For a rental, decide who monitors the property, keeps the recorded covenant and easement documents, and handles a maintenance or association matter, and apply those procedures consistently. Tenant selection and property management must comply with the Fair Housing Act and applicable Michigan and local protections. A covenant's use limits, an association rule, or a maintenance obligation are property facts, not a reason to treat any applicant or tenant differently on the basis of a protected characteristic. Have Michigan counsel review the rental policies for the specific property.

This article is educational, not legal, tax, financial, surveying, title, fair-housing, retirement-plan, or investment advice. No property, easement, covenant, or strategy is approved or endorsed by the IRS. Have your own self-directed IRA custodian, CPA, Michigan attorney, professional surveyor, title professional, local zoning office, and other qualified advisors review the account, the parcel, the recorded instruments, and the intended use before taking action.

What Rennie can coordinate

Primary sources for the public-rule portions of this review are the recorded instruments themselves in the county register of deeds, the title commitment and its schedule of exceptions, Michigan Compiled Laws sections 565.29 and 565.201 on recording, and the local zoning ordinances. Those sources describe the framework and the specific parcel. The answer for one parcel and one account comes from the recorded documents, the surveyor's field work, and the buyer's own qualified professionals.

Rennie can help identify West Michigan property and organize the real estate side of the review: locating the recorded easements and covenants on the title commitment, pulling the underlying instruments from the register of deeds, aligning the calendar with the survey and the title work, and flagging which restrictions are worth a closer look. The interpretation of the documents, the covenant questions, the tax treatment, and the retirement-account structure stay with the buyer's own attorney, surveyor, custodian, and CPA.