What is a restrictive covenant?
A restrictive covenant is a written agreement between landowners that limit the way land can be used or developed. When purchasing land, particularly for development, it is critical that you understand any potential restrictions that may be placed on it pursuant to a covenant.
The presence of a restrictive covenant may limit your ability to further develop land in the future.
The existence of a restrictive covenant is recorded on the Certificate of Title for the land.
Removing or varying a restrictive covenant?
If you have a covenant restricting your ability to develop the land, you may be able to remove or vary it in one of the following ways:
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By applying to the Supreme Court of Victoria
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By requesting that the planning scheme be amended; or
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By applying for a Planning Permit relating to the covenant
Covenants are divided into two broad categories:
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Covenants created prior to 25 June 1991; and
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Covenants created after 25 June 1991
In our experience, covenants created prior to 25 June 1991 are harder to remove and will require an application to the Supreme Court of Victoria. Covenants created after 25 June 1991 have been made under the reformed property law system, which applies a less restrictive test for their variation or removal.
Do you have a covenant on your property and are unsure what to do next?
In most circumstances, it would be prudent to try to have the covenant removed or varied by applying for a planning permit to your local council. Our team at SettleHub can assist you in making this streamlined application with all the necessary documentation. As a first step, you must provide the council with a letter from a property law expert confirming the existence of the covenant and indicating which land and landowners have the benefit of the covenant restriction.
We understand the burden that a covenant can place on your development ambitions and aim to ensure the process is efficient and cost effective. In the circumstances where an application to the council fails or is unlikely to be successful, our lawyers can assist you in making an application to the Supreme Court to have the covenant varied or removed.
This process is highly technical and can lead to multiple cost implications if improperly handled. In our expert hands, you can be assured that the most effective application is being made to the courts to have your matter resolved.
FAQs on Restrictive Covenants
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Variation should be considered if by varying the covenant you will be able to achieve your development goals. It is typically easier to convince the council to approve a planning permit that seeks only a variation.
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However, applying for removal is more beneficial as it usually results in an overall increase in property value.
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If you made an application to the council and it is refused, you can appeal the decision to VCAT.
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In very limited circumstances, VCAT may overturn the council’s decision.