What is a restrictive covenant?
A restrictive covenant is a restriction on the way land may be used. A restrictive covenant is created through a deed of agreement between two or more parties, usually agreed to in the contract and recorded on the Transfer of Land document.
Section 88(1) of the Transfer of Land Act 1958 provides that the burden of a restrictive covenant may be recorded on the Certificate of Title. For the covenant to be registered on the title it must be negative and prohibit the performance of specified acts, must be given for the benefit of another's land, must touch and concern the land and must be intend to run with the land. If the covenant meets these requirements it will usually bind all successors in title.
Modern restrictive covenants often include prohibitions against building more than one house on a lot. Older restrictive covenants often prohibit the removal of soil or clay or other kinds of excavations not associated with the construction of a dwelling.
If you are interested in purchasing a property and it has a restrictive covenant registered on the title or mentioned in the contract, you should seek legal advice to ensure that you may use the property as you intend. Varying or removing such restrictions is a complicated matter.
