What is a covenant and what does it mean for land owners?
Most modern subdivisions now include land covenants which are
registered against the titles. These are effectively rules that the
land owner must abide by when owning the land. Many covenants
relate to how and what you can build, with a view to keeping up the
value of the subdivision. However, there are also ongoing
obligations that can impact on your future use of the land so
buyers need to fully understand the nature and potential effect of
The covenants are mutual which means that each owner in the
subdivision must both abide by the covenants and ensure that their
neighbour abides by them too. Many land covenants contain a clause
providing for liquidated damages (i.e. an amount of money) to be
payable for every day you are in breach of the covenants.
In addition, neighbours are willing to take action when it comes
to policing land covenants. A recent example of this was seen at
the Travis County Estate in Burwood, where residents blocked the
delivery of a relocatable house to the subdivision because it
breached the land covenants.
Some of the more common covenants you will see are a prohibition
Further subdividing the land;
Use of certain materials e.g. second hand roofing;
Certain activities in a rural setting such as pig farming;
Certain breeds of pets e.g. Staffordshire terriers, pit bull
terriers or Rottweilers.
There are also positive covenants relating to the initial design
and construction of the dwelling such as setback requirements and
fencing rules which may have an impact on the cost of your dream
Most subdivisions contain a covenant that states that the
developer must approve the plans for the dwelling prior to building
commencing. This is probably the covenant that causes the most
difficulties as evidence of this sign-off will be required when the
property is sold in the future. If this record is not kept and the
developer disappears then this can cause major problems at sale
We have also come across instances where the covenants provide
that construction must commence within a set timeframe of the issue
of title and we are trying to sell a section outside of that time
A further covenant might be a prohibition on objecting to
further development of surrounding lands.
How long do covenants last?
Most covenants will remain on the land forever however it is
becoming more common now to see a date (say 10 years) after which
certain covenants will no longer apply. A covenant can normally
only be removed with the consent of the land owner(s) having the
benefit of the covenant.
From a Developers point of view
Badly drafted or open ended covenants can cause enormous
headaches for property developers also. It is not just a case of
rolling over land covenants between developments as each set of
covenants needs to be carefully considered and updated in line with
good conveyancing practice and the specific circumstances of your
We at Cavell Leitch have considerable experience in both acting
for developers creating land covenants as part of their
subdivision, as well as acting for the ultimate purchasers of
sections subject to land covenants. We would be very pleased to
assist you with any queries you may have in this area.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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