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What is a restrictive covenant?
A restrictive covenant is a private treaty or written agreement between landowners that limits the way land can be used and developed.
It is most commonly applied when an owner subdivides land for sale and wishes to apply restrictions on the use and development of the lots, for example:
- Limiting development to only one house on a lot
- Control the type of building materials used for new buildings and fences
- Prohibit the use of the land for quarrying operation
State and local governments do not create or enforce restrictive covenants. This is done by owners of the land who benefit from the covenant, usually through the Supreme Court.
The planning system is only involved if there’s an application to remove or vary a covenant.
Find out if a restrictive covenant affects your property
Restrictive covenants are recorded as an encumbrance on folios within the Title Register. If you wish to find out whether your property is affected by a restrictive covenant, visit Landata to obtain a search of the Register.
When it comes to the variation or removal of a restrictive covenant from your property title, it is strongly advisable to engage the services of a licensed conveyancer or solicitor.
Where can I get advice on a specific covenant?
You should seek independent legal advice from a solicitor or property law professional experienced in these matters.
For help finding a professional, the Law Institute of Victoria has a find a lawyer service.
Vary or remove a restrictive covenant
There are 3 ways to remove a covenant from title:
- apply to the Supreme Court of Victoria
- apply for a planning permit to remove or vary the restrictive covenant
- request to amend the planning scheme.
Different considerations apply to the planning process depending on when the restrictive covenant was applied.
Contact your local council for advice about the planning options for removing a covenant.
Apply to the Supreme Court
The Supreme Court process: Applications for the modification or discharge of restrictive covenants.
Section 84 of the Property Law Act 1958 sets out the tests for considering the amendment or removal of a restrictive covenant at the Supreme Court.
Go to the Supreme Court website.
Apply for a planning permit
Anyone 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 you’ve notified the owner about the application.
Make the application to the responsible authority. You must include 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).
Discuss your proposed application with the responsible authority before you finalise and submit it. They can provide advice about the kinds of supporting information you need to submit with the application.
Refer to the schedule to clause 72.01 of your planning scheme to identify the responsible authority.
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
- placed on the site subject to the application
- published in the local newspaper.
People can object to your application. More weight is given to objections from owners of land benefited by the covenant.
Special requirements for granting a permit
A responsible authority must consider matters set out in sections 60(2) and (5) of the Planning and Environment Act 1987 (the Act) in considering whether it should issue a planning permit to vary or remove a restrictive covenant.
Section 60(2) applies to restrictive covenants created on or after 25 June 1991: a planning permit can’t 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: a planning permit can’t 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.
Application assessment
The rules in the Act for regular permit applications also apply to applications to remove or vary a restrictive covenant:
- the responsible authority must consider what detriment would be caused to a benefiting landowner by the removal or variation
- 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.
To vary or remove a covenant using the planning permit process contact the council or responsible authority.
More information about applying for a planning permit.
Amend the planning scheme
You can to request an amendment to the schedule to clause 52.02 of the planning scheme.
Anybody can request a planning scheme amendment, but the amendment must be prepared by a planning authority (usually the council) with the approval of the Minister for Planning. The planning authority is not obliged to prepare an amendment even if requested to and there is no appeal right. This applies to any planning scheme amendment request.
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 doesn’t agree to a change that has been requested, the submission will 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 isn’t usually 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.
To vary or remove a covenant using the amendment process, contact the relevant council.
More information about the planning scheme amendment process.
Covenants are complex
Covenants can be hard to understand as they often use legal words and unfamiliar jargon.
Even covenants that look similar might use slightly different words, resulting in different restrictions on the use or development of the land. As an example, a covenant may only allow a dwelling while another only allows one dwelling. They may look like they provide for the same thing but they do not.
Each covenant needs to be individually interpreted.
What does burdened land or benefited land mean?
For the purposes of a restrictive covenant, land that is burden by the covenant means that the restrictions specified in the covenant apply to them and benefited land means that the land gets the benefit of the covenant. Owners of land benefited by the covenant are the only people able to enforce the covenant.
Covenants can vary
Sometimes only one lot is burdened and one lot benefits (see Overview for definition); other times many lots are burdened and many lots benefit.
In new housing estates it‘s common for the subdivider to place a restriction on each lot in the estate so that all or many of the lot owners benefit from the covenant and can enforce it 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, you might need to search the original plan of the subdivision and earlier titles to identify the benefited owners.
Selling burdened land
Registered restrictive covenants run with the land: when the burdened land is sold, the new owner(s) are bound by the covenant.
Section 32C of the Sale of Land Act 1962 requires details of restrictive covenants to be included in a section 32 statement.
Lapse date
Some restrictive covenants have a lapse date, or a date when they end.
Most don’t. That means the restrictions apply to the land even if it’s sold multiple times; the covenant will remain on title until it is removed.
Enforcement
The landowners who benefit from a restrictive covenant are the only people who are able to enforce a restrictive covenant.
Neither councils nor the government is responsible for the enforcement of covenants.
Special rules for applications where a covenant applies
If you’re applying for a planning permit but the land is subject to a restrictive covenant, special rules apply.
You won’t be granted a planning permit 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 (section 61(4) of the Act).
For example: a planning permit to erect a three-metre-high fence can’t be issued if there’s 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 to allow a three-metre-high fence, or
- an application to remove or vary the covenant is submitted and granted at the same time as the planning permit.
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 landowners 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 making an application for a planning permit to do something that would result in a breach of a registered restrictive covenant. A responsible authority is barred from issuing a planning permit in such a case unless a permit has been issued or other permission given 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.
Other agreements
An agreement made under section 173 of the Act, usually as part of a planning permit process, which may be registered on title and restricts the way land is used or developed, is not a registered restrictive covenant.
The above information doesn’t apply to these agreements. Division 2 of Part 8 of the Act provides the process for section 173 agreements. These agreements are a statutory instrument which can be enforced by the responsible authority (usually the council), or through the Victorian Civil and Administrative Tribunal.
More information about section 173 agreements.
Page last updated: 14/11/24