Property
5. Covenants
Authors: Staff Legal Eagle
Firm / Chambers:
Last updated: 12 Jul 2015
- The term 'covenant' refers to a restriction on the use of land.
- A covenant can be a 'positive' covenant which places an obligation on a person to do a certain thing such as to repair or maintain the property or to build a house or fence.
- A covenant can also be a 'negative' covenant requiring a person not to do a certain thing such as not to build above a certain height or not to build a structure in a particular area on the property.
- The person who bears the burden of a covenant meaning that they are required to act or refrain from acting in certain ways is called the 'covenanter'.
- If there is a person who benefits from a covenant they are called the 'covenantee'. Breach of a covenant gives the covenantee the right to sue the covenanter for damages.
- One of the main considerations relating to convenants is their enforceability. This includes whether the covenant is legal and who it can be enforced against. In NSW section 70A of the Conveyancing Act 1919 (NSW) states that a restrictive covenant must be shown on the register of title in order to be enforceable.
- A covenant will generally not be enforceable against any successors in title. If you want to ensure that the covenant passes to the next owner of the interest in land you can create a chain of covenants between the original covenantee and covenanter and their successors in title. For example where the first covenanter promises to ensure that each subsequent purchaser will enter into an identical covenant with the next purchaser.
- A covenant may be enforceable if it is considered to be an incident or an essential part of an easement (a right to use or enter land without possessing it) such as the driveway of a battle-axe block or a corridor for electrical supply lines.
- Under NSW law a covenant may be enforceable under principles of equity. For a covenant to be enforceable in equity the following preconditions must be satisfied:
- the covenant must be negative in nature;
- the covenant must be for the protection of land retained by the covenantee; and
- the burden of the covenant must have been intended to run with the covenanter’s land (attach to the land).
- Conveyancing law in NSW allows creation of positive covenants for repair or maintenance. A public positive covenant may be created by a particular government authority to impose obligations on the owner of the land in favour of the government authority. Under sections 88D and 88E of the Conveyancing Act 1919 (NSW) a government authority may impose a public positive covenant on any land vested in it (where it has an immediate right to possession) or not vested (such as land owned by or leased to someone else). Positive covenants such as these may create obligations requiring:
- maintenance, repair and insurance of any structure on the land; or
- carrying out specified development on the land.
- The law dealing with covenants can be vague and legal outcomes may vary dramatically on a case-by-case basis. When faced with an issue surrounding rights and obligations arising from a covenant an individual should always seek expert legal advice relevant to their individual case.
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