Australia: Registered covenants or restrictions - how councils can regulate land use

Last Updated: 23 December 2017
Article by Peter Barakate

Councils have the power to regulate land use by way of public positive covenants and restrictions on use, although this power is often forgotten.

Councils are enabled to impose public positive covenants and restrictions on their own land and on the land of third parties, and provide for their enforcement by Sections 88D and 88E of the Conveyancing Act 1919.

The reason why councils impose these covenants and restrictions on their own land is to curtail the future use of the land by purchasers from council.

The immediate questions that arise when considering these powers are:

  • what constitutes covenants and restrictions;
  • how are they created; and
  • how are they enforced?

What constitutes a public positive covenant and a restriction?

Public positive covenants require land owners to undertake works on land for the benefit of a council.

These works include:

  • the carrying out of development on land;
  • the provision of services on or to the land or other land in its vicinity; or
  • the maintenance, repair or insurance of any structural work on the land.

Such covenants can also impose terms or conditions for the performance of such obligations.

Examples of public positive covenants include the requirement for land owners to maintain landscaping, provide for stormwater retention pits or waste storage facilities in a development.

Restrictions on use are different because they prevent acts from being done on land. Examples include not using land for the sale of goods or the use of showrooms and not using land for medical or hospital purposes. Covenants and restrictions always burden a parcel of land for the benefit of the council. They should not be confused with easements which give the benefited land owner or benefited council the right to use another person's property for a particular purpose (such as a right of carriage way or channel for stormwater drainage). Covenants cannot, however, be used to require a land owner to transfer title.

Development

The type of development which public positive convents can require of land owners includes:

  • the use of land;
  • the subdivision of land;
  • the erection of a building;
  • the carrying out of a work; and
  • the demolition of a building or work.
"Councils have the power to regulate land use by way of public positive covenants and restrictions on use, although this power is often forgotten."

Subdivision does not include the dedication of public roads by councils, the acquisition of land by agreement or compulsory process, or the consolidation of land. However, councils can use public positive covenants to require land owners to subdivide to effect a public road dedication by the land owners themselves.

How are covenants and restrictions on use created?

The ownership of the land is relevant in considering how covenants and restrictions are created and under which Section of the Conveyancing Act they are created.

Covenants and restrictions are imposed on land owned by councils under section 88D and imposed on land not owned by councils under section 88E of the Conveyancing Act 1919.

Creation under section 88D
Councils may impose covenants or restrictions of use on any land vested in it by way of an order. The order will typically take the form of a resolution made by the elected council or a decision made by an authorised officer of the council under delegation.

The order must be attached to the approved form and lodged for registration at NSW Land Registry Services. It should be noted that the order will have no effect or force until it is registered.

Registration of the covenant or restriction must take place before council enters into an option agreement or contract for sale in order for the covenant or restriction to be enforceable against the option holder or purchaser.

A council may enforce the registered covenant or restriction against any person claiming an interest in the land as if they had entered into the covenant or restriction with council itself. This means that registered owners, mortgagees, lessees, parties with the benefit of an easement etc will be bound to comply with the covenant.

Creation under section 88E
Councils may also impose covenants or restrictions on use of any land not vested in it; however they may only do so with the consent of the land owner and any other person who has a registered interest in the land. Furthermore the land owner and other persons must agree to be bound by the covenant or restriction.

The easiest way for councils to achieve this result is by requiring the covenant or restriction as a condition of development consent.

It is not essential that all holders of registered interests (such as easements, mortgages and leases) be joined to the covenant or restriction over the land. Such parties only need to be joined if their interest is to be bound by the covenant or restriction.

These covenants and restrictions have no force until registered.

Enforcement under Section 88E
Unlike section 88D covenants and restrictions, councils can only enforce restrictions or covenants created under section 88E against a person who is, or claims under, a signatory to the covenant or restriction on use.

This means that it is necessary to show that the person who owns the land acquired it from a person who is a signatory to the covenant. Accordingly, mortgagees and purchasers from mortgagees exercising a power of the sale will not be bound by a registered covenant or restriction.

The benefit of covenants and restrictions
There are three (3) discernible benefits arising from covenants and restrictions.

  1. If there is a failure to comply with the public positive covenant and council obtains a judgment for an amount payable to it, council may lodge with a Registrar-General an application to register a charge over the land for the amount payable to it from time to time: Section 88F.
  2. If council is concerned that a person has engaged or proposes to engage in conduct that would contravene a covenant or a restriction on land, it may apply to the Supreme Court for the grant of an injunction restraining the conduct: Section 88H.
  3. Where a person has contravened a public positive covenant, council may apply to the Supreme Court for an order that the land be conveyed or transferred to the council: Section 88I.

Examples
There are a number of cases in which applicants have challenged consent conditions requiring the registration of covenants and restrictions under section 88E.

These appeals are sometimes successful on the basis that it is unnecessary to reinforce planning principles through the Conveyancing Act 1919 where they are enforceable elsewhere. This approach was taken in the cases of MacDonald v Mosman Municipal Council [1999] NSWLEC 215 and Iris Diversified Property Pty Ltd v Randwick City Council [2010] NSWLEC 1265.

However, more recently in Vlahos v Willoughby City Council [2013] NSWLEC 1068, a consent condition requiring a covenant ensuring the maintenance and protection of 2 weeping Lilly Pilly trees for a 20 year period was upheld. This condition was upheld because, under other environmental planning instruments, there was a real possibility that the trees could be removed without the need for development consent. For this reason, the earlier line of authority was distinguished.

Reflections on section 88E
In imposing covenants and restrictions on use on land held by others, councils should carefully consider the applicable environmental planning instruments for the land.

If those instruments will guarantee the outcome without the need for a covenant or a restriction, then council should not impose a section 88E covenant or restriction on the land in question.

If, however, the environmental planning instruments would undermine the desired outcome without the protection afforded by a covenant or restriction, then council can safely require a covenant or restriction as a condition of consent.

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions