Covenant on title - urgent advice needed please

[Belu]

Hi all,

Will be calling the lawyers about this tomorrow but was hoping if anyone can assist tonight please.

I have a signed offer which is yet to go unconditional and I just received the covenant information that is placed on the title.

It is from 1936 and the wording of the restrictions is "That I the proprietor of the land hereby transfered will not excavate carry awat or remove or permit to be excavated carried away or removed any earth marl stone clay gravel or sand from the land hereby transferred. And this covenant shall be noted and appear in any future Certificate of Title for the said land and any part or parts thereof as an encumbrance affecting the same"

Basically my plan for the block is to either get plans and permits and sell in 18 months or subdivide and develop into 3 townhouses and sell in 3 years.

Does anyone know if the above would stop me doing this please?

Cheers

Ben

 

[urban cowboy]

a few issues there...

who has put the caveat on there?? do you know why the covenant was put on there in the first place?? is the property held by the same owner since 1936??

you may be up for a trip to court to have the covenant cleared...is your solicitor clued up on property law?? because they are going to need to be...

as for whether it affects your ability to develop, God only knows at this point without the background knowledge of who, what and why the caveat is there.

can you amend the offer to be subject to satisfactory investigations regarding the covenant?

 

[Belu]

I can't ammend it for that but the offer is not unconditional as of yet.

it is still not the original owner and has passed through many owners since 1935 but a bit further up refers to the "successors and transferees registered propriator for the time being of the land"

I am not sure if it is saying that the sucessors are not allowed to do it or that it is to be noted by the successors.

hmmm... definitely one for the lawyers i think?

 

[urban cowboy]

yeah...

mate i've seen many many covenant in my time, but that one is a little to curly for me unfortunately - time for your lawyer to earn their keep!!

As i alluded to, it will most likely require some digging to find out who and why the caveat was put there in the first place - it sounds like it was to stop quarrying or something on the site...once you (solicitors) figure that out then you can go about getting it removed or finding a work around.

sorry couldn't be of more help!!

cheers
UC

 

[buzzlightyear]

Can we clarify, caveat or covenant? They are different

From the wording this is a covenant not a caveat, which is attached to the title, placing certain restrictions in the use of land/property typcially eg single dwelling covenant - only allows one dwelling to be built on the land.

Covenants can be taken off the title, your solicitor will confirm the process. I wouldn't have thought this one, would be an issue. I recall asking the process to have a single dwelling covenant removed from a title and it had to be advertised (like planning permits are) and if there was even one objection, your application would be rejected.

I would however make sure that the process and likelihood of success are well understood before proceeding with the purchase.

 

[Belu]

it is definitely a covenant

 

[urban cowboy]

sorry, meant covenant...

been dealing with caveats lately and have them on the brain.

apologies for the confusion.

 

[Belu]

Just had a search to fine tune my definition:

Covenant – A right or obligation affecting a property and noted on the title of that property for the benefit of some party eg a property might be affected by a covenant restricting the property owner from constructing a dwelling of more than one storey in height.

Covenant - Imposes conditions on the use of a parcel of land.

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By the looks of it, it is a restriction on not removing any land or soil from the site. as it is a flat block will that stop development? The house on the parcel of land is a 1950'2/60's concrete commission building so obviously built after 1936?

 

[Raddles]

Hi there
you do have to find out who the covenant is meant to benefit - is it one block of land? or is it a community? - it may have been done at a time to try and stop further development or to stop certain types of development.

Covenants can be removed - but you need to deal with whoever it is meant to benefit to try and get it removed - not necessarily a trip to the courts - but negotiation between parties which could ultimately stop you from what you want to do - would definately be making any contract conditional upon the removal of that covenant.
thanks

 

[PrimeCommercial]

Exert taken from Here

Starts on page 8 under the heading
DIGGING AND SWIMMING POOL EXCAVATION - “TO DIG OR
NOT TO DIG”

..... one kind of covenant has been the subject of much
discussion and dispute. I refer to the 'no quarrying' covenants, which are
common across many areas of metropolitan Melbourne, as well as some
regional areas.
35. Most of these covenants were imposed by developers and subdividers of
land in the 1920s and 1930s, and generally read along the following lines (or
similar):
… no quarrying operations shall be carried out on the said land hereby
transferred nor shall any marl sand stone or gravel be dug or removed or
allowed to be dug or removed from the said lot. . excepting excavating for the
foundation of any buildings to be erected or placed thereon or for use in such
building..

 

[Belu]

unfortunatly cannot add that condition.

This one coule make me a fair bit of money - or nothing if the covenant cannot come off.

If i check with the lawyers tomorrow and they say it will stop development and/or be hard to take off I might see about the finance clause, thoughts?

 

[PrimeCommercial]

I noted this Under Subdivision on page 11

It is an accepted principle that subdivision of itself does not cause breach of
a covenant relating to construction, frontage, single dwelling, and cost or
construction materials. Dukovski v Banyule CC [2003] VCAT 190
(13/2/2003), Hampsons Enterprises v Casey CC (P3125/2002 –
23/6/2003). See also Weiler v Casey CC [2004] VCAT 470 (20/4/2004)
for a similar conclusion on a single dwelling S 173 agreement.

 

[PrimeCommercial]

It seems a very curly one Belu and definately one for a specalist property solicitor. From doing a bit of a search these are common in some areas of Melbourne so you should be able to find a solicitor familiar with these types of covenants

 

[Belu]

49. Putting that view to one side, it seems to me that the Tribunal's approach to these covenants has shifted, from a more traditional, and literal interpretation, to a more 'purposive' interpretation. That is to say, the Tribunal has begun to look behind the words of these covenants, and to search for what was the likely intention at the time of the covenants.

50. It is likely that the Tribunal will continue to interpret the 'no quarrying' covenants in a purposive, rather than a literal, way. What is not clear is whether the Tribunal will adopt a similar approach for other common forms of covenant. If so, responsible authorities may be expected to have closer regard to the circumstances surrounding the execution of restrictive covenants, in order to draw conclusions as to how they should be interpreted.

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Looks like it should be alright, will definitely flight it past the lawyer and planning guy tomorrow though.

 

[boomtown]

Get your lawyer to put it in writing to you. That puts them on the hook to get it right.