In an earlier post I touched on the subject of covenants when discussing Rights of Carriageway. I thought it might be worthwhile digging a little further into this aspect of land titles.
A covenant is like a promise that must be kept by each new buyer of a property. It can affect vacant land or land that is built on.
Covenants are usually “restrictive” in that they stop the owner of the property from doing something. These sorts of covenants are materially identical to formal “Restrictions on the Use of Land” that may also be recorded on a title document.
These covenants are often created at the time land is subdivided for development. There are a few of reasons for this. Firstly, many developers like to retain a level of control over their development, so that the land within a subdivision retains its value through the development cycle. This may be achieved by restricting what can be built, where it can be built and/or from what materials it can be built. There may also be a desire to impart a particular character on a development by restricting certain land uses. In this way, a developer is able to effectively regulate the standard and quality of building or the general amenity within a subdivision, preserving its value.
Many purchasers like to see this sort of regulation in any case, as it provides a level of certainty with regard to their property investment. All of the lots in the subdivision that created my own lot, for example, include various covenants, one of which reads as follows:
There are also covenants in place in areas around the shire that restrict land uses such as the keeping of hooved animals. Note that covenants such as these generally operate independently of conditions that might be imposed through a land use planning instrument such as a Local Environmental Plan (LEP). Certain building styles or land uses that are otherwise permitted under an LEP may well be constrained or prohibited through a covenant on a specific land title.
In NSW, restrictive covenants are binding on the owner of the land. As such, the responsibility for any breach will transfer with land ownership. Very careful attention therefore needs to be paid to any covenants when purchasing property or building. Even if you do not experience any difficulty following a breach of covenant while you are the owner, you may well do so when it comes time to sell—a prospective purchaser may have little interest in taking on any potential problem.
Covenants may, nonetheless, be “positive” in that they may require the owner to carry out certain developments, provide services or maintain structures on the land. Positive covenants are more common in community and strata title styles of development.
More details relating to covenants and land titles are available from the Land & Property Information website at www.lpi.nsw.gov.au.
Pete Harrison ~ The QPR Blog cross-reference
26 April 2020 @ 14:17
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