Restrictive Covenants on Property: What Victorian Buyers Must Know
A restrictive covenant limits what you can do with a property — even decades after it was created. Before buying in Victoria, make sure you understand what covenants apply.
A restrictive covenant is one of those property law concepts that sounds technical but has very practical implications. If a covenant restricts what you can build or how you can use the land, it could affect your renovation plans, subdivision hopes, or business intentions — sometimes permanently.
What is a restrictive covenant?
A restrictive covenant is a legally binding obligation that runs with the land and restricts what the owner can do with it. Covenants are typically created when land is first subdivided, and they transfer to every future owner automatically. They are registered on the title.
Unlike planning rules (which can be changed by council), restrictive covenants are private agreements and can only be removed by court order or by the agreement of all benefiting parties.
Common restrictions in Victorian covenants
- Minimum floor area — the dwelling must be at least a certain size (e.g. 200 sqm of living area)
- Dwelling type — only one dwelling permitted on the lot (prevents subdivision or dual occupancy)
- External materials — the home must be built of specified materials (e.g. brick, not fibro)
- Building height limits — restricting how tall a structure can be
- Fencing restrictions — prohibiting certain fence types along the front boundary
- No commercial activity — prohibiting running a business from the property
- Vehicle restrictions — limiting certain types of vehicles (e.g. trucks, caravans) from being parked on the land
How do I find out if a property has a covenant?
Covenants are registered on the certificate of title and must be disclosed in the Section 32 Vendor Statement. The Section 32 should include a copy of the full covenant document, including all restrictions.
If a covenant is attached as a schedule or annexure, read it carefully. The specific restrictions matter — a covenant that says "only one dwelling" has very different implications for a development site than one that simply restricts fence height.
Can a covenant expire?
Some covenants include a time limit. For example, a covenant may say it applies for 10 years from the registration of the plan of subdivision, or until a specific date. If the covenant has already expired, it no longer binds you — but you'll need a conveyancer to confirm this based on the registration date and the expiry clause.
Many covenants, especially those created in older subdivisions, have no expiry date and remain in force indefinitely.
Can a covenant be removed?
Yes — but it's not straightforward. In Victoria, you can apply to the Supreme Court under Section 84 of the Property Law Act 1958 to modify or discharge a covenant. The court will consider whether the covenant is obsolete, whether it provides any practical benefit to the benefiting parties, and whether removing it would injure them.
The process is expensive and not guaranteed to succeed. Do not assume you can remove a covenant after purchase if it interferes with your plans.
Questions to ask your conveyancer about covenants
- What are the exact restrictions in the covenant?
- Does the covenant have an expiry date, and has it already passed?
- Who holds the benefit of the covenant — the neighbouring lots, or a developer?
- Would my plans (renovation, subdivision, business use) breach the covenant?
- What would it cost and take to remove or modify it if needed?
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