Agreements and restrictive covenants

Restrictive convenants

A restrictive covenant is a private agreement between landowners that may restrict the way land can be used and developed. It's 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.

A covenant is not administered or enforced by the government or a council.

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
• be given for the benefit of another's land
• touch and concern the land
• intend to run with the land.

If the covenant meets these requirements it will usually bind all successors in title.

Implications of restrictive covenants

If you're 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 make sure you can use the property as you intend. Varying or removing such restrictions is a complicated matter.

For good advice on covenants, how they operate and their implications for planning permit applications, visit the Department of Transport, Planning and Local Infrastructure website.

Section 173 agreements

A Section 173 agreement is an agreement between the land owner and the council made under the Planning & Environment Act 1987.

A Section 173 agreement sets out conditions or restrictions on the use and/or development of land. When the agreement is registered on title, it binds both the present land owner and any subsequent owner of that land.

If a Section 173 agreement has been registered on a title, a search of the agreements' reference (dealing) number will provide full details of the agreement and any associated documents such as urban design guidelines or building envelope plans for new housing estates.

Implications of Section 173 agreements

This agreement is intended to operate permanently and may deal with issues such as:

• constraining future development by preventing subdivision or prohibiting dwellings
• addressing health and safety issues - contamination, clean-up, landscaping, road works.

The agreement may also impose various fees or levies payable by an owner.