Covenants Affecting Land Titles

Property Law: 22 March 2019

Covenants recorded in respect of the Title to your property can significantly restrict its development potential and reduce its underlying value.  Many people wrongly assume that nothing can be done about them.

Often when applying for a planning permit, owners are asked to provide a legal opinion confirming that the covenant on their Title will not be breached by the proposed development.

We are frequently called on to provide a formal advice as to the proper interpretation of such covenants.  All sorts of questions arise from time to time.

• Does a 'no excavation clause' prevent a basement garage? 
• What does 'double fronted' mean? 
• What is the difference between a dwelling, a dwelling house and a messuage? 
• Does brick veneer satisfy a requirement for brick construction?
• In which direction does a house 'face'?

Where, however, the covenant would prevent the proposed development, it becomes necessary to consider the alternative ways in which the covenant might be removed or varied.  In some circumstances an application for a planning permit to remove or vary the covenant will be the most efficient way of proceeding.

The major difficulty with that course is that the Planning and Environment Act makes it almost impossible to remove or vary a covenant where any person with the benefit of the covenant objects.  Moreover the informal nature of the planning permit process through Council and VCAT make it likely that such a person will object.

Another alternative is to apply to the Supreme Court of Victoria under section 84 of the Property Law Act.  Aitken Partners have had recent success in modifying and removing covenants affecting 4 different properties in Springvale and East St. Kilda by using the Supreme Court process and we are currently preparing a case for a property in Coburg.

The case in support of the removal or variation needs to be carefully researched and argued because, at the end of the day, the Court has a discretion whether or not to agree to the request.  The costs of an uncontested application are likely to be in the order of $10,000 to $20,000 and the time required can vary from 4 weeks to 4 months depending on the particular covenant and the Titles involved.

Because of our experience with covenants, we have been consulted by clients as far away as the south coast of Tasmania (where we successfully assisted our clients to resist a neighbour's attempt to remove a covenant).