Removal of Covenants on title

Quite often a person looking to purchase a property will find that there are covenants on title which appear to restrict how the property can be used or what can be built on the property etc.  Sometimes these covenants will be old and appear to be unreasonably restrictive for today’s times.  Fortunately it is possible to have these covenants removed as set out in the sections below:

Currently there appear to be three processes to apply for the removal of a covenant on title:

1. s81A Real Property Act 1900 – application to the Registrar General

This application by a registered proprietor will only be successful where the covenant is a building materials covenant, fencing covenant or value of structures covenant and the covenant has been in effect for at least 12 years and the Registrar General believes the covenant is of a type likely to lose any practical value after 12 years of operation.

In addition the Registrar General (or the applicant if directed by the Registrar General) must serve a notice of the application to certain people and give such people 1 month to lodge a caveat prohibiting the granting of the application if they so desire.  The Registrar General cannot extinguish the covenant until any caveats or court orders lodged against the grant of the application have been removed from the title.

1. s81J Real Property Act 1900 – removal of the restrictive covenant by the Registrar General

The Registrar General may independently extinguish a restrictive covenant under certain situations set out in s81J of the Real Property Act - where for example the restrictive covenant is limited in operation or has no practical value or application.

 A registered proprietor can lodge a Request for the Registrar General to consider in his or her own absolute discretion the cancellation of the recording of a restrictive covenant that may be extinguished on the grounds specified in s81J.

1. s89 Conveyancing Act 1919 – application to the Court

The Court may extinguish a restriction arising under a covenant in a number of situations including where:

●   the restriction ought to be deemed obsolete

●   the continued existence of the covenant would impede the reasonable user of the land without securing practical benefit to the person entitled to the benefit of the covenant

●   a person entitled to the benefit of the covenant has agreed to it being extinguished, or by his acts or omissions may reasonably be considered to have waived the benefit of the covenant

●   the extinguishment would not substantially injure the person entitled to the benefit of the covenant

Note that s28 of the Environmental Planning and Assessment Act 1979 authorises an environmental planning instrument (“EPI”) to declare that covenants on title be of no effect to the extent necessary for the application of the EPI.  Accordingly where a restrictive covenant appears on title documents and is of concern, applicable EPIs can be considered to determine whether the covenant is enforceable at that point in time.

For further inquiries in relation to the above article, please contact: David Beale, Partner, Direct line: 9957 3685 Fax: 9923 2893 E-mail: dbeale@rbhm.com.au