A restrictive covenant is a private treaty or written agreement between land owners that limits the way land can be used and developed. The planning system is only involved if there’s an application to remove or vary a covenant, councils and government don’t create or enforce them.
A restrictive covenant limits 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.
- Restrictions are customised to the needs of an area or development. Covenants are designed to either benefit or protect other land.
- For example, common restrictive covenants can:
- Limit the use and development of a lot to a single house
- Control the type of building materials used for new buildings and fences.
A registered restrictive covenant is a restrictive covenant recorded on the certificate of title for the burdened land.
Types of restrictive covenant
There are three main types of restrictive covenants:
- Building covenants imposed by developers to make sure the owners of lots complete building works within a certain timeframe and following specific building requirements (eg: building height, colours and setbacks)
- Covenants designed to protect the neighbourhood character or guide the long term development of an area
- 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 aren’t responsible for preparing, writing or enforcing covenants.
- A registered restrictive covenant is recorded on the certificate of title of the burdened land. The details of the covenant can be:
on the face of the title, or
- 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. You can visit the Land Information Centre to search a title and obtain other information:
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
If you can’t get to the Land Information Centre in person, you can purchase a title online or engage a title searcher to find the information.
Remove or vary
Obtain your own, independent expert legal advice before you try to remove or vary a covenant. Your legal professional will help determine which option is best for your circumstances. Always take likely costs – which may be substantial – into account before you start any action.
There are three main ways to remove or vary a covenant:
- Apply to the Supreme Court for an order under section 84 of the Property Law Act 1958
- Amend the planning scheme under Part 3 of the Planning and Environment Act 1987 (see below)
- Apply for a planning permit under Part 4 of the Planning and Environment Act 1987 (see below).
Each method can take time, may be costly and involve certain requirements or 'tests' that can be difficult to satisfy.
Amend the planning scheme under Part 3 of the Planning and Environment Act 1987.
You’ll need 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 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’s 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.
Apply for a planning permit under Part 4 of the Planning and Environment Act 1987 (the Act).
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 (see below). 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).
You should 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.
Usually the local council is the responsible authority, but sometimes it will be the Minister for Planning or some other person / authority.
Refer to the schedule to Clause 61.01 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, and
- published in the local newspaper.
People can object to your application.
Special requirements for granting a permit
You need to meet strict requirements to be granted a planning permit to remove or vary a registered restrictive covenant. The requirements 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: 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.
If the responsible authority refuses to grant your planning permit, you can 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 can apply to VCAT for a review of the decision.
The rules in the Act for regular permit applications also apply to applications 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.
More information about the planning permit process.
Special rules for planning applications
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 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 making an application for a planning permit to do something that would result in a breach of a registered restrictive covenant unless an 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.
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 above information doesn’t apply to these agreements.
For information about section 173 agreements refer to Chapter 8 of Using Victoria's Planning System. These agreements are a statutory instrument which can be enforced by the responsible authority (usually the council), or through Victorian Civil and Administrative Tribunal (VCAT).
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.
Covenants are complex
Covenants can be hard to understand: 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. Each covenant needs to be individually interpreted.
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.
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.
The land owners who benefit from a restrictive covenant are responsible for enforcing it, not local councils.
If there’s a breach of a restrictive covenant, the person who owns land benefiting from the covenant can take action against the owner of the burdened land through the courts.
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 firstname.lastname@example.org.
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.