What to look for when purchasing land
By Ron Cohen
20 April 2017
Anyone seeking to purchase land should have a property solicitor vet the Contract and Vendor Statement before signing.
A legal review of the Contract documents will, amongst other things, identify any restrictions affecting the land, including whether there are any easements or restrictive covenants relating to the property.
Easements are rights that an individual has over someone else’s land.
An easement is a legal right to use another person’s land for a specific limited purpose even though they are not the owner of that land. The owner of the land grants another person a right to use their property for a specified use but the full legal title of the land remains with the owner.
Easements generally contain the following characteristics:
Dominant land (that is the land benefited by the easement) and servient land (being the land burdened by the easement);
The easement must be for the benefit of the dominant land;
The dominant and servient land must not be owned and occupied by the same person; and
Easements must be for a specific purpose and cannot be too wide or vague.
Common easements include:
A right of way (this type of easement allows a person to pass through another person’s land), e.g. to permit a neighbour to use a private roadway or pathway over another person’s land; and
An easement for services such as water, electricity or sewerage (often in favour of a public authority who have the right to enter the servient land). For example a right for a water authority to run a sewer or drain across a strip of someone’s private property.
The owner of the servient land must not prevent access to their land by the person benefiting from the easement, and may not materially interfere with the easement without the benefiting party’s consent.
A restrictive covenant is a private agreement between two land owners to limit the way that land can be used or developed, often imposing obligations on land owners not to do something on their land or to restrict the way that the person’s land may be used and developed.
Restrictive covenants are often intended to enhance the dominant land’s property value by controlling development on the restricted or burdened land.
Common typical examples of restrictive covenants include:
A stipulation on how many dwellings may be built on the land, e.g. a single dwelling covenant means that only a single residential dwelling can be built on the land;
A covenant stipulating materials by which the dwelling on the land must be constructed;
Prohibiting the building of a structure, such as a house, above a certain height; and
Restrictive covenant prohibiting the use of the land for quarrying operations.
Easements and restrictive covenants generally run with the land. They are usually registered on title and are binding upon successors in title and purchasers of the servient and dominant lands.
It is important to ascertain if a property you are intending to acquire is affected by any easements or restrictive covenants. They may, for example, restrict the purchaser’s future use of the property (e.g. if the purchaser intends to develop the land) etc.
A property lawyer can identify and advise on these and how they impact upon the land and what rights a land owner may have to enforce or remove them.
Self Managed Superannuation Funds and Property Investment Part 2: Stamp Duty when Transferring Property Assets
By Ron Cohen
19 December 2018
Self-Managed Superannuation Funds and Property Investment Part 1: Using Borrowed Funds for Real Property Investment
By Ron Cohen
4 December 2018
Developers – Are you ready for 1 July 2018? New GST withholding regime for residential property transactions
By Nafsika Palbas
26 June 2018
Considering renovating your apartment? Have you checked you legally own it?
By Rachael Hammond
12 June 2018