Restrictive covenants on property titles can become outdated relics that hinder development and create unnecessary burdens for owners. Here to shed light on this often-overlooked aspect of property law is property specialist and College of Law adjunct lecturer, Greg Stilianou. In this interview Greg explains the common types of obsolete covenants, legal pathways for their removal, and potential reforms that could streamline the process for property owners.
When yesterday's standards clash with today's planning controls
“Restrictive covenants, which are recorded on a property’s land title, are typically created to regulate land use in a way that benefits other properties,” Greg explains. “In practice, though, many covenants have become obsolete, particularly those dealing with matters now governed by planning laws and environmental planning instruments.”
Common examples include restrictions on the type of building materials that may be used, fencing requirements, or minimum construction values for buildings.
“These covenants were once useful in maintaining neighborhood standards, but today, they are largely redundant given the existence of modern planning controls,” Greg says. “Despite their redundancy, they can still impose unnecessary burdens on property owners, limiting development potential and creating obstacles for buyers and developers.”
Legal pathways to covenant removal: Exploring Section 81A
“The Real Property Act 1900 provides a mechanism for removing certain types of obsolete covenants,” Greg explains.
“Section 81A of the Act allows the registered proprietor of land affected by a ‘building materials covenant’, a ‘fencing covenant’, or a ‘value of structures covenant’ to apply to the Land Titles Office for removal, provided the covenant has been in effect for at least 12 years.”
A key advantage of this process is that the owner of the burdened land does not need to obtain consent from the benefitting landowners.
“Instead, the land titles office issues notifications to relevant parties, allowing them an opportunity to object. In my experience, objections are rare—many property owners are unaware their land even benefits from such covenants, as they are recorded only on the burdened land’s title, not the benefitting land,” Greg explains.
However, challenges arise for covenants that do not fall within the categories covered by Section 81A.
“These must be removed via alternative legal mechanisms, such as approaching the owner to agree to a release of the covenant, but this may see them demanding a payment of compensation, or applying to the Supreme Court for modification or extinguishment under Section 89 of the Conveyancing Act 1919, which can be a more complex and costly process.”
Practical guidance for property owners facing restrictive covenants
“The first step is to review the property’s title to identify any restrictive covenants,” Greg advises. “If a covenant is recorded, the owner should consider whether its subject matter remains relevant under modern planning controls. If it deals with matters now regulated by planning laws—such as building materials, fencing, or minimum structure values—there’s a good chance it may qualify for removal under section 81A of the Real Property Act 1900.”
Determining its enforceability becomes more complex, if the covenant does not fall within those categories.
“It requires considering factors such as whether the covenant still serves a practical purpose, and whether it is capable of being enforced. Legal advice is often necessary at this stage to assess options for removal or modification, particularly if a Supreme Court application may be required.”
How obsolete covenants affect property value
Obsolete covenants can negatively impact property values and marketability because they create uncertainty and potential restrictions on development. Buyers and developers may be deterred if they perceive a covenant as an unnecessary limitation, even if it no longer serves a practical purpose.
“The benefits of removing an obsolete covenant are clear: it enhances flexibility for future development, eliminates uncertainty, and can make a property more attractive to potential buyers,” Greg says. “However, the process does come with some risks, particularly if the covenant does not fall within the scope of Section 81A and requires a more complex legal route for removal.”
Encouragingly, the Office of the Registrar-General has acknowledged these challenges and is considering reforms to Section 81A to make the removal process more straightforward.
“Proposed changes include expanding the class of covenants eligible for removal after 12 years, deeming these covenants obsolete without the need for notifying benefitting landowners, and even introducing expiry dates for newly created covenants to prevent future issues,” Greg says.
“Ultimately, for property owners dealing with restrictive covenants, the key is to identify whether the covenant is truly obsolete and, if so, take advantage of the legal mechanisms available to remove it.”
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