What is a restriction affecting Title? 

A restriction is a limitation or condition on how a certain parcel of land is used.  Restrictions on land can be created in different ways.  Restrictions can be registered on a Certificate of Title, unregistered or implemented through planning schemes.

Restrictions on the use of land may include (but are not limited to) the following:

  • covenant registered on title;
  • section 173 agreement;
  • easement registered on title;
  • unregistered easement (not registered on title);
  • planning scheme;
  • special terms and conditions included in a contract of sale

What is a restrictive covenant?

A restrictive covenant limits the use or development of land for the benefit of other land.  A restrictive covenant is generally negative in nature and runs with the land.  Common terms used for restrictive covenants are as follows:

  • Burdened land is the land where the restrictions apply;
  • Benefit land is the land that benefits from the restrictions on the burdened land;
  • Registered restrictive covenant is a restrictive covenant that is recorded on the certificate of title for the burdened land.

Examples of common restrictive covenants includes limits on the use and development of a lot to a single house, and control over the type of building materials used for new buildings and fences.

How do I know if land is burdened by a restrictive covenant?

If your land is burdened by a restrictive covenant it will be registered on the Certificate of Title.  Restrictions registered on the land can be identified on the Certificate of Title or a Register Search Statement under the header “Encumbrances, caveats and notices”.

Can I vary or remove a restrictive covenant?

Yes.  The three main ways to vary a covenant are as follows:

  1. Applying to the Supreme Court for an order under section 84 of the Property Law Act 1958 (Vic);
  2. Amending the planning scheme under Part 3 of the Planning and Environment Act 1987 (Vic);
  3. Applying for a planning permit under Part 4 of the Planning and Environment Act 1987 (Vic).

The two most common methods are by making a planning application to the local council or by application to the Supreme Court.  Each method has certain ‘tests’ that can be difficult to satisfy.  You should seek legal advice before you try to remove or vary a convent to determine which is the best option for your circumstances.

When buying a property, how do I know if the land is restricted in any way that may prevent me using the land the way I wish?

When buying property you should note that the land may be restricted in multiple ways.  Restrictions on land may include (but not limited to):

  1. restrictive covenants registered on title;
  2. easements registered on title;
  3. unregistered easements;
  4. local zoning or overlay;
  5. design guidelines enforced in contract of sale.

What is a section 173 Agreement?

A section 173 Agreement is a legal agreement made between Council and another party pursuant to section 173 of the Planning and Environment Act (1987) (Vic).  Generally, the other party to the agreement will be the landowner however in some cases a third party, such as a referral authority may also be involved.

A section 173 agreement may provide for:

  • The prohibition, restriction or regulation of the use or development of the land;
  • Set conditions under which you can use or develop the land for specified purposes.
  • Set out requirements that will achieve planning objectives of Council or implement an amendment to the planning scheme of which you have been notified.

What is the difference between a planning scheme, zone and overlay?

A planning scheme is a statutory document which sets out objectives, policies and provisions for the use, development and protection of land in the area to which it applies.   Use of land is the way the land is used or the purpose of the land such as a dwelling, a retail shop, an office, etc.  Development of land involves construction, alteration or demolition of a building or works and the subdivision or consolidation of land.

A planning scheme regulates the use and development of land through planning provisions to achieve those objectives and policies.  Section 6 of the Planning and Environment Act 1987 (Vic) sets out matters that a planning scheme may provide for.

The planning scheme zones land for particular uses such as residential, rural, employment, industrial, etc.  All land in Victoria is divided into zones by local government.  A zone indicates what land can and cannot be used for.  A zone sets out land use controls into three sections:

  1. section 1 – land uses that do not require a planning permit;
  2. section 2 – land uses that require a planning permit; and
  3. section 3 – prohibited uses.

Uses of land may be prohibited because they conflict with other uses, such as industrial use of land in a residential zone.

The planning scheme map will show if land has an overlay in addition to the zone. Whilst all land is zoned, not all land will be subject to an overlay.  An overlay may protect attributes or constrain land due to environmental hazards or resources.

Overlays apply special controls over land such as to protect heritage under a Heritage

The planning scheme will also determine if a property is within a bushfire prone area.  If a property is within a bushfire prone area, specific bushfire construction standards will apply.  Landowners are required to meet the minimum Bushfire Attack Level (“ “BAL”) specified.  A BAL measures the severity of a building’s potential exposure to ember attack, radiant heat and direct flame contact.

What is an easement?

An easement is a section of land registered on plan to a title which gives someone or an authority the right to use the land for a specific purpose, even though that person or authority is not the registered proprietor.  An easement can be a private right between specified landowners or it can be granted to a public authority by operation of statute.  Generally, easements are created to provide land with permanent access to utilities, essential services and communications passing over, under or through neighbouring land.  They can also be used to allow a neighbour to pass over one property to access another.

Easements restrict the use of land as the registered proprietor cannot construction any dwelling, building or structure over an easement.  If the easement is in favour of a public authority, a registerer proprietor can seek permission from Council to build over the easement however the Council can remove the dwelling, building or structure should they need to access the easement for any reason.

What is an unregistered easement?

An unregistered easement is an easement that still restricts the use of a property however is not registered on the title.  Regulatory easements that were created before the Subdivision Act 1988 (Vic) came into effect may not be registered on title.  An example of an easement that may not be registered on title is an easement in favour of the water authority.  A water authority can have an unregistered easement on a property which would not show up on a plan to the title however would show up on a sewers and drains plan.

Is a Vendor required to disclose an unregistered easement in a section 32 vendor statement?

Section 32(2)(b) of the Sale of Land Act 1962 (Vic) requires a vendor statement to include a description of any registered or unregistered easement and provide particulars of any failure to comply with the easement.  However, vendors are under no duty to disclosure easements and restrictions which they are not aware of.

What restrictions can a Vendor enforce in a Contract of Sale?

Design restrictions are most commonly enforced in “off-the-plan” contracts.  In most instances, Vendors and Developers of an estate will include a special condition in the contract that states you must build any dwelling in accordance with the design guidelines of the estate.  The design guidelines will often have requirements setting out items such as what materials need to be used, and the colours that should be in your design.  Any plans would need to be approved by the development committee prior to commencing construction of a dwelling.

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