Understanding Restrictive Covenants in Victoria
Restrictive covenants can stop you from doing certain things on your land, even if planning rules would otherwise allow it. They are binding private agreements, often dating back decades, that still have legal force today.
As explained by David Dawn, Licensed Conveyancer at Victorian Property Settlements, restrictive covenants are one of the most overlooked elements in a property transaction. Many buyers don’t realise they exist until they try to build, renovate or subdivide.
What is a Restrictive Covenant?
A restrictive covenant is a registered limitation on how land can be used. It’s a legal agreement — often created by a developer or past owner — that prevents certain activities or building types on the land.
Restrictive covenants are usually registered under the Transfer of Land Act 1958 (Vic) and are enforceable by neighbouring landowners who benefit from the restriction.
Examples include:
Single dwelling only restrictions (no dual occupancy)
Building material controls (e.g. no fibro or weatherboard)
Minimum setback requirements (e.g. house must be 6 metres from the front boundary)
Roof colour, fencing, or garage location controls
No commercial use or short-term letting
They run with the land, meaning they bind all future owners unless formally removed.
Where do you find Restrictive Covenants?
Covenants appear most frequently in:
Established suburban areas developed between the 1920s–1960s
Modern housing estates where developers impose uniformity
Rural residential subdivisions aiming to preserve amenity
Properties sold by churches, government or philanthropic bodies with moral or usage restrictions
They are noted on the title and in the section 32 Statement under "Encumbrances".
Idiosyncrasies of Restrictive Covenants
They are enforceable by neighbouring lots, not just Councils
Planning permits do not override covenants
You can’t assume “everyone else did it” — past breaches don’t extinguish the covenant
Removal requires a Supreme Court application or a Planning Scheme amendment, which is slow and expensive
Councils are required to consider covenants before issuing permits
Even if the covenant is 80 years old, it remains binding until formally removed.
How do they differ from other interests?
Unlike Easements, covenants stop you from doing something, rather than allowing another person to use your land
Unlike Caveats, covenants don’t expire or lapse — they remain on title indefinitely
Unlike Zoning, covenants are private legal restrictions, not government planning controls
They don’t require renewal or active enforcement — they’re automatically binding unless challenged
Benefits of Restrictive Covenants
✅ Protects neighbourhood character and amenity (e.g. preserving low-density housing)
✅ Helps retain consistency in design or land use across an estate
✅ May protect property values by discouraging overdevelopment or poor-quality work
✅ Gives landowners rights to stop undesirable building or land use on neighbouring lots
Drawbacks and risks
🚩 Can block dual occupancy, subdivision or renovations — even with Council approval
🚩 Difficult and expensive to remove (often $30,000+ in legal and expert fees)
🚩 Can lead to disputes or objections from neighbours if breached
🚩 Many buyers overlook them and only discover them after plans are rejected
🚩 Insurance and lending may be impacted if a structure breaches the covenant
Key Takeaway
Restrictive covenants limit what you can do with your land and are legally binding even if you weren’t told about them. Always check the title carefully and ask for plain-English advice on what the covenant means.
📞 Not sure if a covenant applies?
We’ll review your title and Section 32, interpret the covenant, and advise whether your plans are affected. If needed, we can also refer you to planning professionals who deal with removal applications.
