Easements, Covenants and Title Restrictions on Subdivided Land in Australia

Overview

Every time land is subdivided in Australia, new interests are often created on the resulting titles — easements that give neighbours or authorities the right to use parts of your land, restrictive covenants that limit what you can build, and positive covenants that impose ongoing maintenance obligations. These interests run with the land, meaning they bind every future owner, not just the person who agreed to them at subdivision.

Understanding what easements and covenants exist on a title — and how new ones are created through subdivision — is fundamental for both developers planning a project and buyers purchasing a subdivided lot. Getting this wrong can render a development infeasible, reduce a lot's value, or expose a landowner to liability.

What Is an Easement?

An easement is a right that one party has to use land belonging to another for a specific, defined purpose. The land that benefits from the easement is called the dominant tenement; the land that is burdened is the servient tenement. Easements run with the land — they attach to the title, not the person — so they remain in place when the land is sold.

In a subdivision context, easements are almost universally required. When a block is divided into two or more lots, each new lot needs access to utilities, drainage, and sometimes the public road network. Easements are the legal mechanism that makes this possible without one lot-owner having to buy part of their neighbour's land outright.

Types of Easements in Subdivision

Restrictive Covenants

A restrictive covenant is a promise, registered on title, that the landowner will not do a specific thing on their land. Unlike easements (which grant a right to use land), restrictive covenants prohibit certain uses or activities. They are created at subdivision to protect the amenity or value of neighbouring lots.

Common restrictive covenants on subdivided lots include:

• Building materials: Requiring that any dwelling be constructed of brick, render, or specific cladding materials — prohibiting fibro, colorbond, or weatherboard construction.
• Building height: Limiting the maximum height of structures to protect views or solar access on adjoining lots.
• Setbacks: Requiring minimum distances from boundaries beyond those required by council — a developer may impose stricter setbacks to protect the character of the estate.
• Single dwelling restriction: Prohibiting the construction of more than one dwelling per lot — preventing future subdivision or dual occupancy.
• Use restrictions: Prohibiting commercial use of a residential lot, or restricting certain activities that may create noise, traffic, or nuisance.
• Architectural standards: Requiring approval from a developer-appointed design panel before construction commences — common in master-planned estates.

Restrictive covenants bind every subsequent owner of the lot. They cannot be ignored simply because the original developer is no longer involved. Breaching a covenant can result in injunctions requiring demolition or removal of non-compliant works — a very costly outcome.

Positive Covenants

Whereas a restrictive covenant prohibits something, a positive covenant requires the landowner to actively do something — usually to maintain or repair shared infrastructure. Examples common in subdivision contexts include:

• Maintaining a shared driveway to a defined standard.
• Maintaining a retaining wall on the lot boundary.
• Keeping a stormwater detention basin on the lot clear and operational.
• Contributing to the maintenance costs of shared infrastructure.

Positive covenants are enforceable against the current owner of the land — meaning if you buy a lot with a positive covenant to maintain a shared driveway, that obligation is yours regardless of whether you used or benefited from the driveway before purchase.

Section 88B Instruments (NSW)

In New South Wales, easements, restrictions on use, positive covenants, and profits à prendre created in connection with a subdivision are recorded in a Section 88B instrument — a document created under section 88B of the Conveyancing Act 1919 (NSW) that accompanies the deposited plan when lodged with NSW Land Registry Services.

The Section 88B instrument is a critical document that:

• Identifies each easement, covenant, or restriction created by the subdivision and precisely describes its terms, area, and the lots that benefit and are burdened.
• Registers simultaneously with the deposited plan — the two documents are lodged together and registered at the same time.
• Can only be finalised by a solicitor, though a registered surveyor may prepare a draft version. The distinction matters: if a solicitor is not involved, the instrument cannot be completed.
• Once registered, becomes part of the Torrens register and is legally binding on all current and future owners of the affected lots.

When conducting due diligence on a NSW property, always request a copy of the Section 88B instrument alongside the title search. It reveals all easements and restrictions registered at the time of subdivision — many of which are not immediately visible from the title itself.

Restrictions in Victoria and Other States

Victoria does not use a Section 88B instrument. Instead, easements and restrictions on subdivision lots are created and recorded differently:

• Plans of subdivision (Vic): Easements are typically shown on the plan of subdivision itself and created by registration of that plan under the Subdivision Act 1988 (Vic). The rights and responsibilities attaching to service easements are often defined by the relevant utility legislation.
• Transfer of Land Act 1958 (Vic): Restrictions on use of land (including restrictive covenants) may be registered as a separate dealing on the folio of the register under section 88 of the Transfer of Land Act.
• Queensland: Easements are registered under the Land Title Act 1994. They may be created on a plan of survey or by a separate instrument lodged for registration with the Titles Registry.
• Western Australia: Easements and restrictive covenants are registered under the Transfer of Land Act 1893, appearing on the certificate of title as registered interests.

Regardless of state, the principle is the same: always obtain a full title search and any accompanying plan or instrument documents to understand what encumbrances run with the land before purchasing or developing.

How Easements and Covenants Affect Development

Easements and covenants directly affect what can be built and where. Key practical impacts include:

• Building exclusion zones: Most easements prohibit the construction of any permanent structure within the easement corridor. A 3-metre-wide stormwater easement running along the rear boundary of a lot effectively reduces the usable building area.
• Access requirements: A right of carriageway must remain unobstructed. If the easement passes through the centre of a lot, it may prevent any development that would block vehicle passage.
• Design restrictions: Restrictive covenants requiring specific materials or setbacks may conflict with an owner's planned design, requiring modification of plans or — in some cases — application to court to have the covenant removed.
• Feasibility impact: A title search revealing significant easements or restrictive covenants should prompt a recalculation of the project feasibility — the effective developable area may be materially smaller than the cadastral area of the lot.

Removing or Modifying Easements and Covenants

Easements and restrictive covenants can sometimes be removed or modified, but the process is neither quick nor cheap. The available pathways vary by state:

• Agreement of the benefiting party: The simplest method — if all parties benefiting from the easement or covenant agree to its removal, a discharge or modification can be registered. Payment may be required to secure the other party's agreement.
• Supreme Court application: In most states, an application can be made to the Supreme Court to modify or extinguish a restrictive covenant on grounds including that it is obsolete, that its continuation impedes the reasonable use of the land, or that the persons entitled to enforce it have agreed. This process is expensive and uncertain.
• Section 84 (Vic) / equivalent: Victoria's Property Law Act 1958 provides a mechanism for the Supreme Court to modify or discharge a restrictive covenant. Courts consider whether the restriction is still reasonably necessary and whether modification would injure the persons entitled to benefit from it.
• Planning permit override (limited): In some states, a planning permit granted by the relevant authority may override a restrictive covenant for the specific development approved — though this is state and fact-specific.

Key Takeaways

• Easements and covenants are registered on the title and bind all future owners — they must be identified before purchasing or developing any subdivided lot.
• Rights of carriageway, drainage easements, and services easements are created in almost every residential subdivision.
• Restrictive covenants limit what can be built; positive covenants impose ongoing maintenance obligations — both are enforceable against you as a current owner.
• In NSW, the Section 88B instrument records all easements and restrictions created on subdivision and must be reviewed as part of due diligence.
• Removing an easement or covenant requires either agreement from all benefiting parties or a court application — neither is simple or inexpensive.