Which term describes a legal instrument that prohibits or limits certain uses of land?

Prepare for the Michigan State Title Insurance Exam. Enhance your study with flashcards and multiple-choice questions. Understand questions with detailed hints and explanations. Ace your exam!

The term that best describes a legal instrument that prohibits or limits certain uses of land is "Covenant." A covenant is a formal agreement or promise within a deed or contract regarding the use of land. It is often used in real estate to impose specific restrictions on the property to ensure that potential issues or disputes are avoided among property owners.

Covenants are legally binding agreements that can either restrict the type of activities permitted on the land or impose obligations on the landowner, ensuring that certain standards are maintained within a community. This can include limitations on building types, land use, and even aesthetic aspects to maintain property values and quality of life in a neighborhood.

Other terms like restriction and encumbrance are related but do not fully encompass the same legal implications as a covenant. A restriction may refer more broadly to any limitations placed on property use, while encumbrance typically refers to any claim or liability against the property. Liability is a legal term that pertains to being responsible for something, often in context with legal or financial obligations, rather than restrictions on land use. Therefore, understanding the specific legal nuances of a covenant is essential when discussing limitations on property.

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