15 Nov Removing a Restrictive Covenant
Don’t be caught out by a covenant over your land title. A planning permit can’t be approved if it is contrary to a restrictive covenant on the title. If there is a covenant it will need to varied or removed before the proposal can be considered. We frequently get contacted by people who are either looking to purchase land with a covenant or own land with a covenant, and so have developed some further information on the process of removing a covenant.
So, what are the steps to follow:
- Identify if you have a covenant
- Confirm if the covenant will impact your plans
- Remove/vary if needed
Do You Have a Covenant?
Before you need to worry about removing a covenant, you need to identify that there is something there! First up, lets discuss what a covenant is. It is a restriction that is listed on your property title. The title will just provide the reference document that contains the restriction, and then you will need to review that document to find out the specifics of what is being restricted for your property. Have a read of How to Check for a Covenant to get details on how to find out if you have one.
Will It Impact You?
Now that you have confirmed that you have a covenant the next thing is to understand what the covenant is restricting and how it might affect you. You may have already received advice on this, but if you are unsure about the wording of the restriction or need some help to understand if it will affect your plans, we have offer covenant advice for you. Just head over there to find out how we can provide you with advice on your specific covenant.
How to Remove a Covenant
So, now that you have identified your covenant and confirmed that it will affect your project you can now consider removing or varying it.
There are three main ways to remove/vary a covenant:
- Applying to the Supreme Court
- Amending the planning scheme; and
- Applying for a planning permit.
Applying to the Supreme Court is a legal method so I would recommend getting professional legal advice before considering that procedure.
Applying for a planning scheme amendment can be a lengthy process and supporting documentation from one or more professionals will likely be needed to justify the amendment. This process is not usually used for individual lots of land, but may be done as part of a large area change such as a rezoning.
Applying for a planning permit is probably the most common and cost effective way that individual covenants are sought to be varied or removed. However, it is important to know that while this is a simple process that doesn’t mean it will necessarily be easy!
Planning Permit Process
You can apply to either vary or remove a covenant. It is the same process, it is simply a matter of deciding if a variation will achieve the result you are after or if a removal is best for your development. We find that at times a variation is looked upon more variably as it is overall less change and more certainty for the beneficiaries, but it does depend on the individual circumstances. Of course, it is always cleaner for a full covenant removal so that should be considered as well.
You apply by lodging a planning application form together with supporting details, a recent copy of your title and covenant and a fee to the local council. More details on the typical planning process can be found here.
You can apply as a combined planning application or by itself. For example, if you have a single dwelling covenant over your land and you wish to build two houses you can apply to remove/vary the covenant at the same time as applying to build the two houses, or you can apply to remove the covenant first. The majority of our clients choose to do the covenant removal/variation first, given the speculative nature of the application which I discuss further below.
As the purpose of a covenant is to control or restrict something for the neighbour’s benefit (the beneficiaries) it will be advertised. Advertising will typically be with letters beneficiaries, a sign on the site and a public notice in the local newspaper.
Remember I mentioned that the process might not be easy? Well this where things can get tricky. Depending on the age of the covenant the Council have to consider if there will be detriment of any kind with the removal/variation of the covenant, including perceived detriment for pre-1991 covenants. The burden is high to demonstrate no detriment, and this test to be met is much higher than general planning applications. Usually the Council will determine that if any objections are received from even one beneficiary it is likely that the application will be refused. As the purpose of the covenant is for the beneficiaries, the Council consider that any objections are sufficient to show that there will be detriment to a beneficiary and therefore the covenant must remain. If no objections are received, then generally the Council will approve the application (though it could still be possible for Council to decide that the potential for detriment still exists and therefore refuse it).
For this reason, many covenant removal applications do not get approved.
Can You Appeal a Refusal?
If an application is refused it can be appealed at the Victorian Civil and Administrative Tribunal (VCAT).
The test to remove a covenant is high and VCAT will closely consider if there is any detriment (including perceived detriment where that applies) to beneficiaries much the same as I described above. In many cases VCAT will uphold Council’s decision to refuse the covenant removal. However, there have been examples of VCAT cases where they have considered not just the objection but other factors. This includes if that objector is located away from the site on another street, if there is any evidence the objection is vexatious or not made in good faith. There have also been cases where things such as a changing neighbourhood have been taken into account when deciding whether a single dwelling covenant is still relevant to an area.
Summary
If you have a covenant on your title that impacts what you want to do on the land, you have the option of applying to remove or vary that covenant. In most cases the simplest and most cost effective way of seeking the removal/variation is by applying for a planning permit. The test to determine if it is appropriate to remove a covenant is high and in most cases if there are any objections to the application, or any chance of detriment to the beneficiaries it will be refused by the Council. While the test to determine VCAT decisions on these matters is similarly high and many such applications are refused, there have been a few examples where it has been determined that an objection was vexatious or other circumstances to warrant the decision to be overturned and a permit to be granted (though I have noted that most of the most recent decisions that I have found at VCAT have refused the application, demonstrating again the difficulty with these types of applications).
Next Steps?
If you have a covenant on your property and are after more specific advice you can purchase covenant advice from us. We will review the covenant/s on your property to give you preliminary details about the beneficiaries and options for you. Visit this page for more information and to purchase it.
If you are ready to lodge an application to vary or remove your restrictive covenant, or have already lodged a development application and have just found out this breaches your covenant, contact us today for further advice and a free quote.