Restrictive covenant removal has become more achievable in Victoria, thanks to a line of Supreme Court decisions that are exposing a common flaw in older covenants. The problem? Many covenants created before 1991 never properly identified which land they were supposed to benefit. And without that identification, the covenant may be unenforceable against current owners.

For developers and homeowners trying to subdivide land burdened by these title restrictions, this presents a genuine opportunity. A covenant that cannot identify its beneficiaries may be discharged under section 84 of the Property Law Act 1958 (Vic) as obsolete.

The Legal Test: Benefiting Land Must Be "Easily Ascertainable"

Victorian property law requires that a restrictive covenant "touches and concerns" the land it benefits. This is not just technical jargon. It means the covenant must be connected to specific, identifiable land rather than simply benefiting individuals personally.

The Supreme Court has repeatedly confirmed that the benefiting land must be capable of identification from the face of the registered document or related registered instruments. You cannot work backwards from historical ownership records or make assumptions about who might have benefited decades ago.

In Beman Pty Ltd v Boroondara City Council [2017] VSC 207, Justice Emerton (as her Honour then was) set out this principle clearly. A covenant given for the personal benefit of individuals, rather than for identifiable land, does not bind successors in title. The covenant becomes a personal promise that dies with the original parties.

This reasoning was applied again in Re Ferraro [2021] VSC 166 and in subsequent unreported decisions. The pattern is consistent: courts will not enforce covenants where the benefiting land cannot be readily identified from the registered documents.

What Makes a Covenant "Vague" Under This Test?

Many covenants registered before the Subdivision Act 1988 came into effect used language that seemed sufficient at the time but fails modern scrutiny. Common problems include:

  • Covenants that benefit "the transferors and their transferees" without naming any land
  • References to "adjoining owners" or "neighbouring properties" without lot numbers or title references
  • Covenants that benefit a named individual or company without specifying the land they owned
  • Documents that assume the reader knows the original subdivision layout but provide no reference to plans

The Victorian planning guidance on restrictive covenants explains that these private agreements between landowners can limit development. But that limitation only holds if the covenant is properly constituted and enforceable.

Section 84 Applications for Restrictive Covenant Removal

If your land is burdened by a covenant that fails to identify its beneficiaries, you can apply to the Supreme Court under section 84(1)(a) of the Property Law Act 1958 (Vic) to have it discharged as obsolete.

The argument runs like this: a covenant that cannot bind successors in title because the benefiting land is unidentifiable has no practical effect. The original beneficiaries (whether individuals or companies) likely no longer exist or no longer own the relevant land. The covenant serves no purpose and should be removed from the title.

This is different from arguing that a covenant is obsolete because circumstances have changed (though that argument can also succeed in the right case). Here, the covenant was arguably never effective at running with the land in the first place.

Academic analysis of covenant modification and removal across Australian jurisdictions confirms that courts have broad discretion to discharge covenants that no longer serve their intended purpose.

What Evidence Do You Need?

A successful section 84 application typically requires:

  • A copy of the covenant instrument and any related registered documents
  • Title searches showing the current ownership of the burdened land
  • Evidence that the original beneficiaries no longer exist or cannot be identified
  • An analysis of whether any land can be identified as benefiting from the covenant

Your lawyer will review the covenant wording carefully. Sometimes what appears vague on first reading can actually be traced to specific land through related instruments. Other times, the deficiency is clear and the application straightforward.

How This Affects Your Subdivision Project

Title restrictions can stop a subdivision before it starts. When you lodge your plan through SPEAR, Land Use Victoria will identify any covenants on the title. If a covenant restricts the number of dwellings, building materials, or land use, it may block your development.

Before assuming you need to vary or remove a covenant through a planning process, check whether the covenant is actually enforceable. If the benefiting land is not ascertainable, you may have a faster path to resolution through the Supreme Court.

This matters for timing. A section 84 application can sometimes be resolved in months, whereas removing covenants through other pathways may involve council processes, advertising, and potential objections from neighbours who may not even have standing to enforce the covenant.

Your surveyor and planner will identify the covenant issue early in feasibility. Bring that information to a property lawyer who can assess whether the covenant is vulnerable to challenge.

Practical Steps If You Suspect Your Covenant Is Defective

Start with a title search. Get a copy of the covenant instrument itself, not just the notation on your title. Read the actual wording. Does it name specific land that benefits? Does it reference a plan of subdivision with lot numbers? Or does it simply name individuals or use vague descriptions?

If the covenant was created before 1991, pay close attention. The Subdivision Act 1988 introduced clearer requirements for covenant registration, so older covenants are more likely to have drafting deficiencies.

Check whether the original beneficiaries still exist. If the covenant benefited a company, has that company been deregistered? If it benefited individuals, can they or their successors be traced? If not, this supports an obsolescence argument.

When your SPEAR application is ready to lodge, you need the covenant issue resolved. Plan for this early in your project timeline.

The Drafting Lesson for New Covenants

These court decisions carry a message for anyone creating new covenants as part of a subdivision. If you want the covenant to bind future owners of the burdened land and be enforceable by future owners of the benefiting land, you must clearly identify both parcels.

Use lot numbers from the plan of subdivision. Reference the plan instrument number. Be specific about which land benefits and which land is burdened. Vague language that seemed adequate in 1960 will not survive modern legal scrutiny.

This information is general in nature. Contact us for advice specific to your project.