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.


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.

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.

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