Will a Restrictive Covenant Prevent Your Development?

Quite possibly the answer is- no!

The case of Harrington v Greenwood Grove Estate Pty Ltd [2011] NSWSC 833, is very instructive with respect to both a local Council’s ability to override covenants and the circumstances in which an owner can have contractual provisions declared unenforceable.

The case decides that where a Council has requested a restrictive covenant or design guidelines be included in a subdivision and these are carried forward in the contract special conditions (even if not contained in a s88B instrument) then the contractual provisions are enforceable against an owner.  However, if Council didn’t make the request and subsequently approves a development contrary to the contract, then the contract is not enforceable against the owner-even though the owner was a party to the contract.  This is because of the power of councils to ignore a covenant if they are approving a lawful development.

S 3.16 of the Environmental Planning and Assessment Act (formerly s28) provides the legislative authority and most councils today have a provision in their Local Environmental Plans consistent with s 28 or the later s 3.16.  The only condition is that the Governor or Minister’s consent is required for the LEP provision, which would not be there if consent had not been granted.

Therefore, local Councils have the power to simply ignore a covenant and the cases say that the covenant is rendered null and of no effect if council lawfully approves a development which is contrary to the covenant.  Moreover, if the council didn’t ask the developer to create the covenant the developer can’t insist that you comply with it on contractual grounds.

Further information:

Restrictive Covenants

For more information or to make an appointment in either our Canberra or Queanbeyan office please do not hesitate to contact Rod Anthes:

+61 2 6206 1300 | e: info@elringtons.com.au

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