Restrictive covenants in Victoria

Commercial Directions

Can they be varied or removed?

What are they?

Restrictive covenants are  a tool for protecting neighbourhood character and restricting long term future development, separate to controls under the local planning schemes.

The common restrictions are:

  • A single dwelling covenant
  • Materials restrictions – for example, limiting building materials to brick, brick and stone and roof tiles
  • No quarrying.

Can they be removed or modified?

When they are obsolete, or the removal of the restriction will no longer adversely affect the benefited land, it may be entirely appropriate to seek to remove or vary the restriction. There are many potential circumstances that will fall into these categories, so that owners and proposed purchasers can consider undertaking development unhindered by often age-old restrictive covenants.

A municipal council is unable to approve an application for a planning permit for the development of land which is contrary to the terms of a registered restrictive covenant over the land.

Best avenue for removal

The best option, either by application to the municipal council or to the Supreme Court of Victoria, will often depend on the number and location of beneficiaries.

What is involved?

The first step is to identify the location and number of ‘beneficiaries’. This is done by an analysis of the parent title, the subdivision plan, the title and the transfer.

The facts of each location and proposal will require careful review against the legal criteria under the relevant legislation.

Relevant considerations

Other factors include:

  • the current neighbourhood development and context
  • changes over time
  • removal of restrictive covenants in the area
  • the extent of any likely effect on the owners of the benefited land as a result of any variation or removal.

The Supreme Court of Victoria decided a number of cases in the last twelve months, providing some clarification on what is required to remove or vary a restricted covenant.

One of these involved land in Boronia encumbered by a 1949 covenant that restricted development to the construction of one dwelling on a lot using only brick, brick veneer and a roof of tiles. A development proposal sought construction of four, two storey dwellings. There was one objector located 270m away.

Relevant considerations were:

  • that restrictive covenants had been removed from a number of titles to land in the area
  • there had also been subdivision development over numerous neighbouring lots that had affected the density of the neighbourhood.

The Court decided in favour of modifying the restrictive covenant.

Key messages

  • It will be easier to show a beneficiary will not be substantially injured the further away the person is from the proposed development
  • The fact there are no objector respondents will not guarantee the Applicant has met the test regarding substantial injury
  • The Court may benefit from a view of the area
  • Any experts engaged to support the Applicant’s case should be very familiar with the particular questions for consideration of the Court.

If you require any advice regarding the interpretation or impact of the terms of a restrictive covenant or wish to discuss the options available to seek the variation or removal of a restrictive covenant, please contact Annabel Viner, Special Counsel (Planning) or Michael Markowitz, Partner (Property).

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