Love Thy Neighbour
By Phillip Leaman
11 July 2017
If you are looking to purchase a large block of land to develop, it is important to consider how restrictive covenants can potentially affect your dealings with such land.
Restrictive covenants can often prevent a development from proceeding. So, whilst that old house on a huge block may seem like an appealing venture, as purchasers and developers, you need to ensure you understand how restrictive covenants can impact your property. Sometimes it may not be the covenant itself that is the thorn, but instead a property owner whose land may benefit from the covenant that affects the property you intend to or have just purchased.
There are a number of ways in which a covenant can be varied and/or removed such as:
- By a Deed of Agreement between all the owners of land that benefit from the restrictive covenant;
- Amendment to the Planning Scheme;
- Application for a Planning Permit; or
- Removal by Supreme Court
However what can sometimes be missed is the fact that before launching into a removal of a covenant, for 3 out of the 4 options above, you must seek the approval of all the property owners that benefit from the restrictive covenant. This could mean you need the consent from a property owner that is 4 streets away.
For example, a removal by way of a planning permit could mean that if the Council receives just 1 objection, the application to vary or remove the covenant would most likely be denied by the Council. This is important to note, because even if you take the matter to the Supreme Court for variation or removal, that one objection from your neighbour could turn your application into a trial, which can be both lengthy and costly.
The variation of a covenant therefore requires a careful commercial and legal analysis.