Planning scheme amendments to remove/vary restrictive covenants

Edward Mahony
30 August 2017

There are four principal ways to remove/vary covenants in Victoria:

1. By application to the Supreme Court under Section 84 the Property Law Act 1958 (Vic)
2. By a Deed of Consent under the Transfer of Land Act 1958 (Vic)
3. By a planning permit application under the Planning and Environment Vic 1987 (Vic)
4. By a Planning Scheme Amendment.

Under the first three methods, it is difficult to remove/vary a covenant in the face of opposition by beneficiaries of the covenant as the tests under the Property Law Act 1958 (Vic) and the Planning and Environment Act 1987 (Vic) do not necessarily enable consideration of the zone controls or strategic context of the land under the planning scheme. A planning scheme amendment does, however, enable consideration of such material in seeking to remove/vary a covenant.

There are no specific tests set out in the Planning and Environment Vic 1987 (Vic) for covenant removal by way of planning scheme amendment, however it does require that the Council agrees to prepare the planning scheme amendment. The relevant considerations to take into account have been refined by a number of planning panel reports, they include:-

1. The objectives of planning in Victoria such as Ministerial directions, planning provisions, strategic plans, policy statements, codes or guidelines in the relevant planning scheme;
2. That the amendment should consider the interests of affected parties, including the beneficiaries of the covenant;
3. Whether the removal or variation of the covenant would enable a use or development that complies with the planning scheme; and
4. Balancing conflicting policy objectives in favour of net community benefit and sustainable development.

Such considerations were applied by the panel report regarding Amendment C112 to the Manningham Planning Scheme recently which sought to authorise the removal of single dwelling covenants. In that case the amendment concerned the removal of covenants at 775-779 Doncaster Road, Doncaster on land zoned Residential Growth, located within a substantial change area and being a preferred location for medium and higher density development under the Manningham Planning Scheme.

In this instance, the panel concluded that the removal of the covenants represented a satisfactory balancing of policies and interests resulting in a new community benefit to the citizens of Manningham and Victoria as it would facilitate the development on the sites. The Panel concluded that development of the sites aligned with the strategic state and local policies and that the broader community benefits outweigh the potential impacts to surrounding benefitting landowners, even though there were objections from beneficiaries. The panel further found that the benefitting landowners’ interests would continue to have the opportunity to participate fully in any future planning permit application process including any amenity impacts of a potential redevelopment.

The planning scheme amendment option is worth considering where a site is affected by a covenant and where the covenant constrains the ability to realise the strategic aspirations for a site that might be in an Activity Centre location or an area earmarked for substantial change.