Understanding Restrictive Covenants in Property Law

Restrictive covenants are legal agreements that impose limitations on the use or development of land. These covenants are crucial in property transactions for several reasons:

  • Impact on Property Value: Certain covenants can either increase or decrease the value of a property.
  • Legal Obligations: Violating a covenant can lead to legal disputes and financial penalties.
  • Future Development: Covenants can significantly influence what changes can be made to a property.

What Is a Restrictive Covenant?

A restrictive covenant is an agreement between landowners that imposes restrictions on the use or development of the land. Common restrictions include restrictions such as:

  • Limiting development to only one house per lot
  • Restricting the dwelling to a single level
  • Dictating the types of building materials used
  • Prohibiting certain activities, such as quarrying or brickmaking

Unlike zoning laws, which are enforced by government authorities, restrictive covenants are enforced by the landowners who benefit from them.

How to Find Out If Your Property Is Affected

Restrictive covenants are noted as an encumbrance on property titles. A title search will reveal if a property is subject to a covenant, but additional property searches may be needed to uncover specific details about the covenant. This is where unsuspecting home buyers can go wrong. Knowing the specifics is crucial before buying a property especially if you are planning any developments or changes.

The Process for Variation or Removal of a Covenant

There are several methods to vary or remove a restrictive covenant from your property title:

  • Court Applications: A legal process to amend or remove a restrictive covenant.
  • Planning Permit: Anyone can apply for a permit to remove or vary a restrictive covenant, involving notification to relevant landowners and possibly the wider community.
  • Planning Scheme Amendment: A complex method that involves amending the planning scheme, typically at a larger scale.

Seeking Legal Advice Before Buying A Property

Given the complexity and potential ramifications of restrictive covenants, engaging a licensed conveyancer or solicitor is always recommended. Proper Contract Advice will make sure you understand the contract and what you are buying. The process of varying or removing a covenant can be costly, time-consuming with no guarantees of the outcome.

If you are looking to buy a property or need advice regarding applying a covenant, speak to our team today for assistance.

Please note: the above article is not legal advice. Every circumstance is different. It is critical that you obtain legal advice in relation to your personal circumstances before taking any action.

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