George W. Bush bought a house in 1988 that came with a deed restricting its use to “white persons only, excluding bona fide servants of any race.” Matt Drudge reported this yesterday and the Texas governor's office confirmed it today. Bush sold the house in 1995. Is this a scandal?
So-called “restrictive covenants” are common in property deeds. They are a way of enforcing some requirement in perpetuity, no matter how often the property changes hands. Typical covenants forbid the onsite consumption of alcohol, the raising of sheep, or even the display of colored Christmas lights. Racial covenants limit the use of the property to members of a specified race or forbid the sale of the property to minorities. Covenants “run with the land,” meaning that future buyers must abide by their terms.
Racial covenants became common after the Civil War. Early this century, after the Supreme Court overturned laws that forbade blacks to live in particular neighborhoods, covenants in deeds became the only way to maintain legally enforceable racial segregation. The Federal Housing Administration, established in 1934 to spur home-ownership by providing mortgage-loan guarantees, actually required real estate developers to include racial covenants in their deeds as a condition of FHA financing. Levittown, the model for postwar suburbia, excluded blacks through racial covenanting. All the houses in the Bushes' Dallas neighborhood have racial covenants. The covenant on the Bush property dates back to 1939.
A racial covenant is, in theory, a voluntary agreement between two private citizens, the buyer and seller. As such, it was argued, a covenant was not affected by the Constitution, which places limits only on government action. But in 1948, the Supreme Court held that it would be unconstitutional for any court, as a government institution, to enforce a racial covenant. The holding was 6-0; three judges opted out of the case because they lived in restricted neighborhoods. Then in 1968, the Fair Housing Act outlawed racial discrimination in housing even by private individuals. It became illegal to refuse to sell your home on the basis of a prospective buyer's race. The act specifically forbade any new racial covenants in deeds.
Today racial covenants are unenforceable and irrelevant in the eyes of the law. Prospective purchasers usually don't even learn of a racial covenant until after they have contracted to buy a home. That's when they pay for a “title search,” which consists of tracing ownership back as far as possible from the seller to the person who sold the property to the seller, to that person's seller, and so on. The purpose is to make sure the seller actually has “good title” to the property and there are no unexpected restrictions or burdens on it (such as an earlier mortgage). To help this process, the law requires that deeds and claims must be “registered,” with a copy on file with the local government. Typically a racial covenant is on file with a deed of many years ago. Subsequent deeds just say that the buyer takes on any restriction that the seller took on. A title search attorney might not even mention a racial covenant to the buyer, since it has no legal effect. But CNN reports that the Bushes' title company did include the racial covenant in their report.
Should Bush have insisted on expunging the racial covenant from his house's title records, even though it was meaningless? It's possible to do this. Generally, it requires that all parties with an interest in a property must agree to invalidate the covenant. That is why a Bush spokesperson claimed that Bush alone could not remove the racial restriction. Some covenants require the approval of two-thirds of neighbors or the permission of a sub-division developer to amend their terms. A deed may also be amended by filing suit for a declaratory judgment that racial covenants are null and void. That judgment would become part of the title, recorded at the registry of land records. Filing a notarized declaration with a property's deed is another means of disavowing a racial covenant.
But most people decide, not unreasonably, that expunging a meaningless provision in a legal document isn't worth the trouble and expense. Other public figures embarrassed by revelations that their property was once encumbered by racial restrictions include: John F. Kennedy, Richard Nixon, Ronald Reagan, and even the senior George Bush.
Explainer thanks real estate attorneys Christopher Bell and Steven Buckman, as well as several shy property professors.