Restrictive covenants

Planning legislation and regulations

A restrictive covenant is a private agreement between land owners to restrict the way land may be used and developed. A covenant is not enforced by the government or a council.

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What is a restrictive covenant?

A restrictive covenant is a private written agreement between landowners to restrict the use or development of land for the benefit of other land. The land where the restrictions apply is called the ‘burdened’ land. The land that benefits from the restrictions on the burdened land is called the ‘benefited’ land.

Restrictive covenants are most commonly applied when a developer subdivides land for sale and wishes to apply some restrictions on the use and development of the lots to benefit or protect other land.

A covenant that limits the use and development of a lot to a single house is a common type of restrictive covenant. Covenants that restrict the type of building materials that can be used for new buildings and fences are also common.

A registered restrictive covenant is a restrictive covenant that is recorded on the certificate of title for the burdened land.

Why are restrictive covenants created?

Restrictive covenants are commonly created to impose restrictions that are customised to the needs of an area or development.

There are three main types of restrictive covenants:

  1. Building covenants imposed by developers to ensure that the owners of lots complete building works within a certain timeframe and in accordance with specific building requirements (for example, in relation to building height, colours and setbacks).

  2. Covenants designed to protect the neighbourhood character or guide the long term development of an area.

  3. Covenants that impose rules of communal living on lot owners.

There are no legislative rules about the kinds of restrictions that can be included in a restrictive covenant. Councils are not responsible for preparing and writing restrictive covenants. They are a private treaty.

Important concepts about restrictive covenants

Covenants can vary in coverage

Sometimes only one lot is burdened and one lot benefits. Sometimes there may be many lots burdened and many lots benefiting.

In new housing estates it is common for the subdivider to place a restriction on each lot in the estate (perhaps to allow only one house to be built on each lot) so that all or many of the lot owners benefit from the covenant and may enforce that covenant on each other.

Identifying the benefiting land can take time

A registered restrictive covenant is recorded on the title of the burdened land but is not recorded on the title of benefiting land. If the benefited land has been subdivided and re-subdivided, it may be necessary to search the original plan of subdivision and earlier titles to identify the benefited owners.

Covenants are complex

Some covenants may be difficult to understand as they often use legal words and unfamiliar jargon. Covenants that appear similar may in fact use slightly different words, resulting in different restrictions on the use or development of the land. Each covenant must be individually interpreted.

Registered restrictive covenants ‘run with the land’

This means that when land that is burdened by a restrictive covenant is sold, the new owner(s) will be bound by the covenant.

Restrictive covenants exist indefinitely unless they have a lapse date

Most restrictive covenants do not have a lapse date, which means that the covenant will bind successive owners of the burdened land for as long as it remains on title, and the covenant will remain on title until it is removed.

Restrictive covenants may be removed or varied

There are three main ways this can be done (see below for details). Each method can take time, may be costly and involve certain requirements or ‘tests’ that can be difficult to satisfy.

Seek independent expert advice

It is important to understand the exact terms of a covenant, what land is burdened, and who may enforce the covenant. You should seek independent advice from a legal practitioner or property law professional who is experienced in dealing with restrictive covenants.

How to find a restrictive covenant

A registered restrictive covenant is recorded on the certificate of title of the burdened land. The details of the covenant may appear on the face of the title, or be set out in a separate document that is referred to in the title.

Land titles are kept by Land Victoria and can be searched for a fee. Land Victoria is located at:

Land Information Centre
Level 9, 570 Bourke St
Melbourne 3000, Victoria

Phone: 03 8636 2831

Opening hours are 8.30am to 4.00pm Monday to Friday

You can visit the Land Information Centre to search a title and obtain other information. You can also purchase a title online.

If you cannot get to the Land Information Centre in person, a title searcher can be engaged to obtain the information.

Who enforces restrictive covenants?

The land owners who benefit from a restrictive covenant are responsible for enforcing the covenant. Local councils are not responsible for this.

If there is a breach of a restrictive covenant, the person who owns land benefiting from the covenant can take action through the courts against the owner of land subject to the covenant.

How to remove or vary a restrictive covenant

There are three main ways to remove or vary a covenant:

  1. By applying to the Supreme Court for an order under section 84 of the Property Law Act 1958.

  2. By amending the planning scheme under Part 3 of the Planning and Environment Act 1987.

  3. By applying for a planning permit under Part 4 of the Planning and Environment Act 1987.

More information about options 2 and 3 are provided below.

If you want to remove or vary a covenant under any of these procedures, you should obtain your own expert legal advice about the option best suited to the particular circumstances of the case. Likely costs, which may be substantial, should be taken into account before starting any action.

Amending the planning scheme

A restrictive covenant can be removed or varied by amending the planning scheme under Part 3 of the Planning and Environment Act 1987.

The amendment is to the schedule to Clause 52.02 of the planning scheme.

A planning scheme amendment can be requested by anybody, but must be prepared by a planning authority (usually the council) with the approval of the Minister for Planning.

The planning authority must give notice to all owners and occupiers of land benefited by the restrictive covenant, and it must consider all submissions. If the planning authority does not agree to a change requested by a submitter, the submission must be referred to an independent planning panel.

Planning scheme amendments usually affect a large area and require a range of strategic matters to be considered. This method is usually not used to remove covenants on individual lots at the request of the owner, unless other changes to the planning scheme (such as a rezoning of the land) are also proposed.

More information about the planning scheme amendment process

The planning permit process

Making an application

A registered restrictive covenant can be removed or varied by applying for a planning permit under Part 4 of the Planning and Environment Act 1987 (the Act).

Any person can apply for a planning permit to remove or vary a registered restrictive covenant. The application must be signed by the owner of the land or accompanied by a declaration that the applicant has notified the owner about the application.

The application must be made to the responsible authority, which is usually the local council. It must be accompanied by a copy of the restrictive covenant and information clearly identifying each lot benefited by the restrictive covenant (refer to section 47(1) of the Act).

It is advisable to discuss a proposed application with the responsible authority before the application is finalised and submitted. The responsible authority can provide advice on the nature of the supporting information to submit with the application.

Notice of an application

Notice of an application to remove or vary a restrictive covenant must be given to all owners and occupiers of land who benefit from the restrictive covenant (subject to some conditions set out in section 47(2) of the Act), and people may object to the application. A notice must also be placed on the site subject to the application, and a notice must be published in the local newspaper.

Special requirements for granting a permit

Strict requirements apply to the granting of a planning permit to remove or vary a registered restrictive covenant. These are set out in sections 60(2) and (5) of the Act.

Section 60(2) applies to restrictive covenants created on or after 25 June 1991. This section states that a planning permit cannot be granted to remove or vary a registered restrictive covenant unless the responsible authority is satisfied that any benefiting landowner will be unlikely to suffer material detriment, including financial loss or loss of amenity.

Section 60(5) applies to restrictive covenants created before 25 June 1991. This section provides that a planning permit cannot be granted to remove or vary a restrictive covenant if a benefiting owner has objected, or if there is any chance that a benefiting owner may suffer detriment of any kind (even if that benefiting owner did not object). This test is very stringent and it may be difficult to prove that there would be no detriment.

Rights of review

If the responsible authority refuses to grant a planning permit, the applicant for the permit may apply to the Victorian Civil and Administrative Tribunal (VCAT) for a review of the decision.

If the responsible authority decides to grant a permit, and a person has objected to the proposal, the objector may apply to VCAT for a review of the decision.

More information about the planning permit process

Special rules for permit applications

The Planning and Environment Act 1987 (the Act) sets special rules about planning permit applications for use or development that would breach a registered restrictive covenant.

An application for land that is burdened by a registered restrictive covenant must be accompanied by a copy of the covenant. If the application is for something that would result in a breach of the covenant, it must also be accompanied by information clearly identifying each lot benefited by the covenant (refer to section 47(1) of the Act).

Section 61(4) of the Act provides that a planning permit cannot be granted for something that would result in a breach of a registered restrictive covenant unless a planning permit is also granted to remove or vary the covenant.

This means, for example, that a planning permit to erect a three metre high fence cannot be issued if there is a covenant restricting fences on the property to two metres in height. A planning permit for a three metre high fence can only be granted if the covenant is removed or varied first or at the same time to allow a higher fence.

Section 61(4) is designed to:

  • stop planning permits being granted for use or development in isolation from the need to remove or vary the covenant
  • avoid the need for affected land owners to respond to separate applications
  • stop projects proceeding in breach of a covenant in the mistaken belief that a planning permit for the use or development authorised the breach.

There is no point in making an application for a planning permit to do something which would result in a breach of a registered restrictive covenant unless application is also made to remove or vary the covenant. If there is any doubt or disagreement about whether a proposal would breach a covenant, you should seek independent legal advice. 

Who can remove or vary a restrictive covenant?

If you decide to apply for a planning permit to remove or vary a restrictive covenant, you will need to make an application to the responsible authority for the relevant planning scheme. In most cases, the local council is the responsible authority. However in some cases, the responsible authority is the Minister for Planning, or some other person or authority specified in the planning scheme.

The schedule to Clause 61.01 of any planning scheme identifies who the responsible authority is for that scheme.

How is a permit application to vary or remove a covenant assessed?

The same rules in the Planning and Environment Act 1987 (the Act) apply to a permit application to remove or vary a restrictive covenant. This means that:

  • the responsible authority must consider what detriment would be caused to a benefiting land owner by the removal or variation; and
  • the limitations on the granting of a permit set out in section 61(4) of the Act apply to an application for removal or variation.

If a proposed use or development is consistent with the zoning and policies of the planning scheme, but would breach a registered restrictive covenant, then a permit will not be granted. Section 61(4) of the Planning and Environment Act 1987 prohibits a responsible authority from granting a permit for anything that would result in a breach of a registered restrictive covenant.

Where can I get legal advice on restrictive covenants?

If you are having difficulty in finding advice from a professional experienced in dealing with restrictive covenants, the Law Institute of Victoria (LIV) Legal Referral Service may be able to help. The LIV provides referrals to member solicitors in Victoria, practising in the relevant area of law.

Other agreements

An agreement made under section 173 of the Planning and Environment Act 1987, which may be registered on title and restrict the way land is used or developed, is not a ‘registered restrictive covenant’. The information on this page does not apply to these agreements. For information about section 173 agreements refer to Chapter 8 of Using Victoria’s Planning System. Instead it is a statutory instrument which may be enforced by the responsible authority (usually the council).

The responsible authority or any person may apply to VCAT for an enforcement order if the use or development of land contravenes or is likely to contravene and agreement.

Contacts

For information about titles and details of covenants, contact the Land Information Centre.

For general advice about how restrictive covenants work in the planning system email us at planning.systems@dtpli.vic.gov.au.

If you want advice on a specific covenant, you should seek independent legal advice from a solicitor or property law professional experienced in these matters.



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