Covenants on Property

What are Restrictive Covenants?

Restrictive covenants are private agreements that place limitations on how a piece of land can be used or developed. When a restrictive covenant is registered on a property's title in Melbourne Victoria, it "runs with the land" - meaning the covenant binds all future owners of that property to the same restrictions.

Some common examples of restrictive covenants you might find on residential property titles in Melbourne and throughout Victoria include:

• Single dwelling covenants that prohibit constructing more than one home on the property
• Building material and design restrictions intended to maintain a uniform neighborhood character
• Prohibitions on removing soil, sand, stone, or other materials from the land (originally used to prevent quarrying)
• Restrictions on using the land for industrial or commercial purposes in a residential area

Restrictive covenants are especially prevalent in certain parts of Melbourne, particularly in the eastern suburbs stretching from Prahran down to Brighton and in the area between Glen Waverley and Boronia. Reservoir boasts the most extensive network of single-dwelling covenants in the city, with over 3,000 lots still subject to restrictions from a 1919 subdivision.

How Do Restrictive Covenants Impact Property Owners?

On the positive side, restrictive covenants help preserve neighborhood character and protect property values by ensuring a cohesive look and feel in the area. However, these covenants can also cause headaches for property owners who want to renovate, expand, repurpose, or subdivide their land.

Many of the covenants still on the books in Victoria were drafted nearly a century ago and use vague or outdated language. The character of the neighborhood may have evolved substantially in the decades since. A restriction that made sense in the 1920s might now feel arbitrary and burdensome to a modern owner.

Yet unlike other encumbrances on title, restrictive covenants can be tricky to remove. Owners often need to get consent from all benefiting parties or seek legal intervention to modify or discharge the covenant. It's a complex and potentially costly process.

Buying Property with a Restrictive Covenant

Because restrictive covenants can significantly limit how you use and develop a property, it's crucial for buyers to carefully review the title paperwork before purchasing land in Melbourne Victoria. Your conveyancer or solicitor can identify any registered covenants and help you understand their practical implications for your plans for the property.

Keep in mind that while a restrictive covenant rarely impacts the purchase price directly, it could constrain your future options. A single-dwelling covenant might dash your dreams of building a duplex. Restrictions on fencing could conflict with your landscaping vision or pool plans.

If you have a specific purpose in mind for the property, make sure you communicate that to your legal representative upfront so they can flag any red flags in the title review process. It's better to adjust your plans or keep hunting for an unrestricted property than to buy land you can't use the way you want.

Removing or Modifying Restrictive Covenants

Already own a property with a problematic covenant you want to remove or modify? You have a few potential options in Melbourne Victoria, each with its own benefits and challenges.

The most common and cost-effective method is to apply for a planning permit from your local council. You'll need to submit a formal application with supporting documentation identifying the covenant and property details. Council will then advertise the request to notify any beneficiaries of the covenant.

If no one objects, council may grant the planning permit to remove or vary the covenant. However, if any beneficiaries do object and can demonstrate they will suffer material detriment, council will likely refuse the permit. This is because planning authorities must be satisfied that removing the covenant won't cause harm to benifiting parties.

Applying to the Supreme Court of Victoria is a second option, especially if you anticipate beneficiaries will oppose the removal. This involves filing a complex application with substantial supporting evidence showing the covenant is obsolete, imposes an unreasonable burden, or has been previously breached in the area. Removal is at the court's discretion and often requires expert legal guidance.

A third path is to request an amendment to the local planning scheme. This is typically only done for large-scale changes affecting an entire area or neighborhood, not individual properties. Anyone can submit an amendment request, but the planning authority must prepare the actual amendment which then goes through an extensive public consultation process before potential approval.

One final option to remove a covenant is by mutual agreement of all benefiting landowners. However, this is only feasible if there are a small number of beneficiaries who are willing to consent to the change. If you can get everyone on board, this is the quickest and easiest solution.

The Difference Between Modifying and Removing Covenants

In some cases, you may have an easier time modifying a restrictive covenant than removing it entirely. Modification involves changing the language or terms of the covenant while still preserving the broad intent and some limitations. For instance, you might alter some design specifics in a building materials covenant without eliminating the core restriction.

Victorian courts and councils are often more receptive to covenant modification than complete removal, especially if the current wording is outdated, imprecise or problematic. Fixing errors or vague language may be a more efficient approach than fighting to strike the whole covenant from title.

Modification can be a good middle ground between the strict status quo and unregulated development, so it's often worth exploring as an alternative to the nuclear option of covenant removal. Your property lawyer can advise on the most strategic approach for your specific circumstances.

How Long Does Removing a Restrictive Covenant Take?

Timing is an important consideration for anyone seeking to remove a restrictive covenant in Melbourne Victoria. Unfortunately, there is no standard timeline as the duration depends heavily on which removal method you pursue and whether any beneficiaries object to the proposal.

Consent from all benefiting landowners is the quickest option, often taking a matter of weeks, but is only viable when there are a small number of beneficiaries open to negotiation. An uncontested council planning permit is the next fastest track, typically determined within a couple months. Anything involving court review or planning scheme changes will take significantly longer, potentially a year or more for complex cases.

The more work you do upfront to identify and resolve potential objections, the smoother the process will go. Experienced legal guidance is invaluable for developing an efficient covenant removal strategy.

Key Takeaways on Restrictive Covenants in Melbourne Victoria

Restrictive covenants are a complex and technical area of property law that can have a major impact on how you can use and develop land in Melbourne Victoria. As a prospective buyer, it's essential to review the title records and understand the implications of any registered covenants before you sign on the dotted line.

If you already own affected property, you have a few options to remove or modify an outdated or onerous covenant, including planning permits, court applications, and planning scheme amendments. In rare cases, you may be able to remove the covenant by agreement with all benefiting landowners.

For tailored advice on your property covenant concerns, contact the experts at Pearson Chambers Conveyancing. Call us on 03 9969 2405 or email contact@pearsonchambers.com.au to discuss your situation and explore the best solution to achieve your property goals.