A restrictive covenant is a registered promise that limits how land can be used or built on.
It binds future owners, not only the owner who first agreed to it.
Some covenants can be removed. The route depends on the type of covenant, its age, and who has the benefit of it.
What a restrictive covenant is
A covenant is an agreement registered on the title to land.
A restrictive covenant stops the owner from doing something. Common examples limit the number of dwellings, the building materials, the height of a building, or the use of the land.
A positive covenant is different. It requires the owner to do something, such as maintain a structure.
Covenants are often created by a developer when land is subdivided, by agreement between neighbours, by registration under section 88B of the Conveyancing Act 1919, or as a condition of a council development consent.
A covenant can last indefinitely and bind each new owner.
How to find out if a covenant affects your land
- Order a title search for the land.
- Look for a restriction on the use of land, a covenant, or a reference to a section 88B instrument.
- Obtain the instrument or dealing that created it. The title only refers to it. The instrument sets out the terms.
- Identify the land that has the benefit of the covenant. These are the owners who can enforce it, and whose release you may need.
- Identify who can release, vary or modify it. The instrument often names this person or authority.
Does council approval override a covenant
Not always.
A complying development certificate must comply with most restrictive covenants that affect the land.
A covenant may not need to be complied with where a council grants development consent, if all of these apply:
- The local environmental plan lets the council approve the development without complying with the covenant.
- The council has development controls that deal with the subject of the covenant.
- The council has assessed the application against those controls and granted consent.
Even then, the covenant can remain recorded on the title.
Check this with your certifier or council before you rely on it.
Ways a covenant can be removed
There are three main routes.
- Release by agreement. The owners with the benefit of the covenant, and the person or authority named in the instrument, sign a release. The release is registered on the title. Where many lots share the benefit, many signatures may be needed.
- Application to the Registrar General. Under the Real Property Act 1900, the Registrar General can extinguish certain obsolete covenants on application. Section 81A covers covenants more than 12 years old that deal with building materials, fencing, or the value of structures. Section 81J covers other cases, such as where a time limit in the covenant has expired, or the benefited and burdened land has been consolidated.
- Order of the Supreme Court. Under section 89 of the Conveyancing Act 1919, the court can modify or wholly or partly extinguish a covenant. The grounds include that the covenant is obsolete, that it impedes the reasonable use of the land without securing a practical benefit, or that removing it will not substantially injure the people who have the benefit of it.
Choosing the route
Start with the cheapest route that can work.
A release is quickest where there are few benefited owners and they agree.
A Registrar General application suits older covenants about materials, fencing or value, or covenants that have plainly lapsed.
A court application suits a covenant that blocks a reasonable development and gives the benefited owners no real benefit. It takes longer and costs more, and the outcome is for the court.
Where people get caught
Buying land for a project without reading the covenant
A covenant limiting the land to one dwelling can stop a duplex or subdivision plan.
Assuming an old covenant no longer applies.
Age alone does not remove a covenant. It stays on the title until it is released or extinguished.
Relying on a development approval alone.
A consent may suspend a covenant only in the circumstances listed above. Building in breach of a covenant can expose you to a claim by the owners with the benefit of it.
Asking only one neighbour.
Where the benefit is spread across a whole estate, one signature will not release it.
Common questions
Who can enforce a restrictive covenant?
Generally the owners of the land that has the benefit of the covenant, and any person or authority the instrument names. The instrument tells you who they are.
How long does a court application take?
It depends on the court's list, the number of benefited owners and whether the application is opposed. We will give you an estimate once we have read the covenant and the title.
Can a covenant be changed rather than removed?
Yes. A covenant can be varied by agreement, and the court can modify a covenant instead of ending it.
A covenant can stop your plans. Have it read before you buy or build. Call (02) 8062 6300.
This article is general information only. It is not legal advice for your situation.