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Covenants and Easements

This article examines covenants and easements, including definitions, how and why covenants and easements are created and how they can be removed.  The area of covenants and easements can be complex and often requires legal experience and knowledge to navigate.  The property and conveyancing team at BSM Law can simplify the process for you.

What is a Covenant?

A covenant is an obligation which affects a landowner and is registered on the title of the land.  A covenant can be positive, and allow the conduction of certain activities, or negative, which disallows certain actions of the owner with or on the land.  Generally, a covenant or covenants will be placed with the aim to maintain the aesthetics and quality of housing development to create a certain standard for construction.  Covenants may do the following;

Set minimum or maximum sizes for the construction of a dwelling

This may be in relation to floor space or the number of levels allowed in the dwelling.

Require certain energy rating standards

This may be set out upon the land as a whole or require a minimum level for each appliance which is installed or used upon the land.

Require or restrict which materials may be used in construction

This may be to ensure that suitable building standards are met for the dwelling or to combat the unique threats posed by the location of the land, for instance bush fire risk.

Require or restrict which external materials may be used

This is generally to ensure that the development on each land is in the spirit of the developments surrounding it. This may require a certain type or colour of fence to be used or limit the colours and materials which may be used upon the exterior of the dwelling.

To regulate the location of ancillary structures

This may exclude or set certain points for installation for ancillary structures such as water tanks and clothes lines.

A covenant upon land can normally be located in the land’s certificate of title or within a separate document referenced within the title. It may also be found within the contract of sale for the land.  The highly experienced property and conveyancing lawyers at Brander Smith McKnight are able to assist you with all aspects of covenants and easements.

Call us to arrange a free 20 minute no obligation consultation that includes case evaluation and cost estimate.

Creation of a covenant

This is dealt with in s88B of the Conveyancing Act 1919 (NSW).  A covenant may be created when a plan of land is lodged with the Registrar General for registration. The plan must state any restrictions which will be imposed which intend to benefit or burden the land of the plan. Upon registration of the land, any of the stated covenants are created and annexed to the land which is benefited by them.

For Torrens Title

When a covenant its created outside the transfer of the land it is generally required that the covenant is created by a written agreement.  This will usually be in the form of a deed, followed by a request to the Registrar General which notes the effect of the deed in the folio of the burdened land.  A covenant may also be created via the incorporation of it into the approved form of transfer when the land is being sold.

How can Covenants be Removed?

Covenants may be removed, otherwise known as extinguished, from land through:

Common ownership

A restrictive covenant is generally removed if the land which is ‘benefit’ and the land which is ‘burdened’ are owned by the same person.

Express release

The covenant may be released by the owner of the land benefited by the covenant or the two parties may agree to release the covenant.

Implied release

A covenant may have an implied released when:

  • the benefited lands owner has submitted to a long course of usage which is wholly inconsistent with the continued existence of the covenant
  • the character of the neighborhood has changed to the extent that the covenant does not hold any more value.
  • the owner of the benefited land has disregarded breaches to such an extent that a reasonable person would believe that future breaches will be ignored. Implied release may not be found when there is mere inactivity in the face of a breach.

Call us to arrange a free 20 minute no obligation consultation that includes case evaluation and cost estimate.

What happens if a Covenant is Breached?

There are multiple remedies available for breach of a covenant,  including;

Damages

Where a covenant has been breached one option will be for the covenantee, the party with the benefit of the covenant to seek an award of damages. Damages may be:

Compensatory Damages: This is assessed considering the of the effect of the breach on the covenantee. Such as the possible loss in value of the land due to the breach or the cost of alleviating the effects of the breach. Compensatory damages will attempt to put the injured party in the position they would have been in if the covenant had not been breached.

Permission Cost: This is assessed taking into consideration the estimated cost to the party in breach of obtaining permission for the breach. 

Injunction

Another remedy which may be sought by the beneficiary of the covenant is an injunction. A positive or prohibitory/negative injunction may be sought:

A positive injunction will require the party in breach to take positive steps to ensure that their actions are following the covenant. 

Prohibitory/Negative: This refers to an injunction issued by the court to require the party in breach of the covenant to refrain from taking actions that continue to be in breach of the covenant. 

Where an urgent remedy is required, an interim injunction can be sought which acts as a temporary measure to ensure that further damage or effects of the breach are put on halt until a final decision is made.

Specific Performance

This is an equitable remedy that compels the party in breach to perform their obligations under the covenant.  Specific performance is usually granted when damages are not an adequate remedy.

Recission 

Recission allows the injured party to cancel the contract and be put back in the position they were in before the covenant was made.

Rectification 

Rectification is used to correct a mistake in the covenant to reflect the true intention of the parties.

What is an Easement?

An easement is a right which allows the owner of one piece of land to carry out a certain limited activity upon another piece of land. This right may allow the land to be used in certain way or prevent the land from being utilised in a particular manner.  The right is registered as an interest on the title of the land.

Positive Easements

A positive easement grants the right to enter another person’s land to allow something to be done on that land.

  • Rights of way
  • Rights to discharge water
  • Rights to occupy a pew in a church
  • Rights to use a kitchen to another’s land to wash and dry clothes
  • Rights to use a toilet on another’s land

Negative Easements

A negative covenant grants rights to prevent something from being done on the land.  While these don’t expressly confer a right of entry, they may imply a right of entry when it is reasonably necessary.

  • Right to the flow of air through defined apertures
  • Right to receive light for a building
  • Right to the support of a building
  • Right to receive water through pipes

How are Easements created?

Creation by express grant

Easements over Torrens title land requires the execution of an approved form of transfer and the particulars of the dealing must be recorded.  Easements should be registered as a plan under s88B of Conveyancing Act 1919 (NSW)

Creation by general words in conveyance or transfer

s67 of the Conveyancing Act 1919 (NSW) allows easements to be created over old system title land by the general words implied into conveyances.

Creation by legislation

Easements created in favour of public authorities and other similar persons can be provided for by legislation.

Creation by implied grant or reservation

When no easement is expressly granted or reserved, the law may imply the granting or reservation of an easement.  This may be through the implied terms of the conveyance or use of the land. For example, the property being described as abutting or adjoining a road or lane implying a right of use over the road or lane and the parties share this common intention.

Creation by prescription

Easements may also be created through prescription, that being the continued use for at least 20 years, being based that the long term continued use of an apparent right presumes the actual right.  The use must have been sufficiently frequent that a reasonable person would deem an enduring right is being asserted.

Creation by acquiescence or estoppel

An easement may be created by acquiescence or estoppel as a remedy when a landowner is deceitful and causes another landowner, due to the deceitful representations, a detriment by relying upon those representations.

Why BSM Lawyers?

Brander Smith McKnight uses only lawyers, not conveyancers, in all aspects of property and conveyancing law.  The area of covenants and easements can be complex and requires experience to navigate all of the legal requirements and rules.  Furthermore, the failure for a consumer to understand and follow these requirements and rules can be very costly.

Our property and conveyancing lawyers are highly experienced and pride themselves on their meticulous drafting and ability to carefully review legal documents and legislation.  They are able to explain the complexities of covenants and easements to you in simple language.

Call us to arrange a free 20 minute no obligation consultation that includes case evaluation and cost estimate.

Brander Smith McKnight Lawyers has offices in Sutherland, Parramatta, Wollongong and Sydney CBD.

 

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