RESTRICTIVE COVENANTS IN VICTORIA

Prior to 12 December 2000

— properties that were encumbered by a restrictive covenant were able to obtain a planning permit from councils without the need to modify a restrictive covenant. However, subsequent amendments to the 1987 Planning and Environment Act (“Planning and Environment Act”) provide a mandatory link between covenants and ordinary council planning permits for development.

Section 61(4) of the Planning and Environment Act 

— now requires the following: 

“If the grant of a permit would authorise anything which would result in a breach of a registered restrictive covenant, the responsible authority must refuse to grant the permit unless a permit has been issued, or a decision made to grant a permit, to allow the removal or variation of the covenant.”

For the above reason, it is no longer possible to obtain a planning permit for a proposal which is prevented by a covenant. 

There are Two Different Processes to Alter Covenants

The original approach is through the Supreme Court while the newer technique is through the planning permit process. Sometimes the decision on the preferred option is clear-cut, while in other cases, it is often a client preference depending on the circumstances of the case. 

We can provide an initial assessment of the above two options as part of our initial feasibility report.

We can also assist with Supreme Court applications under the Property Law Act and planning permit applications under the Planning and Environment Act.

Feasibility Reports

Feasibility reports are often required as part of the due diligence prior to purchasing a property. These reports can determine the significance of the covenant and the number of beneficiaries. They are also required when the client does not know whether it is feasible to make an application through a council or the Supreme Court in an attempt to vary or remove the covenant. 

Supreme Court Applications Under the Property Law Act

Applications to the Supreme Court must be made by a solicitor. Our involvement is based on the preparation of the initial documents to support the application with relevant background title searching. 

We then pass the report on to the solicitors to initiate the application process through the courts. We have a close working relationship with several solicitors and barristers and can provide a referral if required. 

In our report, we are also required to describe how the land is intended to be used. This is because the court is now more inclined to vary a covenant than to remove it.

For this reason, a concept plan or an advanced plan is required. If needed, we can arrange a basic concept plan, similar to the one below.

Planning Permit Applications Under the Planning and Environment Act

We can make direct applications to most Victorian councils for a planning permit to remove or vary a covenant. Our involvement includes preparing the necessary documents, title searching, supporting submissions and confirming that other properties having the benefit of the covenant. 

However, a minority of councils will not support any applications made. Councils are required to give notice to all present-day beneficiaries and any occupiers. They also require a site sign and newspaper advertisement. 

Under the Planning and Environment Act, it is mandatory to refuse an application if an objection is received from a beneficiary (for covenant applications only). In some cases, it is not practical to make an application to a council due to the high number of beneficiaries. 

We can handle all aspects of the permit process up to the point of lodgement in the titles office. At that stage, we normally pass the final document over to our title searcher or return it to the client’s solicitor or conveyancer.