Positive Covenants vs Restrictive Covenants Explained

A covenant on a property title is a promise that runs with the land, and Australian conveyancing recognises two very different kinds. A restrictive covenant stops an owner from doing something, such as building a second dwelling or running a business from home. A positive covenant requires an owner to actively do something, such as maintaining a shared fence or contributing to the upkeep of a private access road. The distinction sounds minor, but it changes whether the promise can actually be enforced against you once you buy the property.

What a Covenant on Title Actually Is

A covenant is a formal promise about how land will be used, created by agreement between landowners and registered on the title so that it binds not just the original parties but, in principle, whoever owns the land afterwards. Covenants are commonly created when a larger block of land is subdivided, allowing the original developer or subsequent owners to control the character of an estate, such as minimum dwelling sizes, building materials, or landscaping standards visible from the street. Covenants are distinct from planning controls imposed by a council, since they are private arrangements between landowners rather than government regulation, though the two can overlap on the same block of land and both need to be checked separately.

Restrictive Covenants: Promises Not to Do Something

A restrictive, or negative, covenant prohibits a particular use of the land. Common examples include a prohibition on further subdivision, a restriction to a single dwelling, minimum floor area requirements, or limits on fencing materials visible from the street. Because a restrictive covenant only requires the owner to refrain from something, courts have long been willing to enforce it against successive owners, provided it was properly created and registered, and provided the land benefiting from the restriction can still be identified. Restrictive covenants are one of the main tools used to preserve the character of an established residential area over a long period, which is why they turn up so often on titles in estates built with a consistent housing style or streetscape in mind.

Positive Covenants: Promises to Actively Do Something

A positive covenant requires the owner to spend money or take action, such as maintaining a retaining wall, contributing to the cost of a shared driveway, or keeping a boundary fence in good repair. This is the more legally fragile category. Under general Australian common law principles, the burden of a positive covenant does not automatically pass to a new owner when land is sold, because the law has traditionally been reluctant to force an ongoing financial or maintenance obligation onto someone who never personally agreed to it. In practice this means a positive covenant is often described by lawyers as binding "in name only" against a new owner unless it has been created in a way that specifically overcomes this general rule, which makes it a very different proposition from a straightforward restrictive covenant.

Why the Distinction Matters for Enforceability

This is the heart of the issue for buyers. A restrictive covenant on your title will generally still bind you even though you never personally negotiated it, and a court is likely to enforce it if you breach it. A positive covenant, on the other hand, may not be enforceable against you at all unless it was created under a specific statutory mechanism that some states, including New South Wales and Victoria, provide for exactly this purpose. Because the position varies by state and depends on how the covenant was originally drafted and registered, this is a question worth raising with a solicitor rather than assuming either way, particularly if a positive obligation looks like it could involve ongoing cost.

How Each Type Appears on a Title Search

Both types of covenant are typically recorded in a section 88B instrument, a separate covenant deed, or noted directly on the folio, and a current title search should disclose their existence along with a reference to the document that created them. The NSW Land Registry Services' guidelines on restrictions on the use of land confirm that a restriction must be negative in nature and cannot impose a positive duty, which is part of why the two categories are treated so differently once registered. Reading the full wording of the instrument, not just the title search summary, is the only reliable way to know exactly what is being restricted or required.

Removing or Varying a Covenant

Covenants can sometimes be removed or varied by agreement between the benefiting and burdened owners, formally registered, or through an application to a court or tribunal where a covenant is obsolete or no longer serves a useful purpose given how the surrounding area has developed. This process can take time and is not guaranteed to succeed, so it should never be assumed as a quick fix if a covenant is inconvenient for your building plans. Some states also allow certain planning approvals to override an old private covenant in narrow circumstances, but this is a specialist area and should not be relied on without a solicitor's advice specific to the covenant and the state in question.

What Your Conveyancer Checks

When reviewing a title for a residential purchase or a subdivision, your conveyancer will identify every covenant, obtain and read the underlying instrument where needed, and explain whether each obligation is likely to bind you as a future owner. This matters just as much for land you are selling, since unresolved uncertainty about an old covenant can slow down a buyer's due diligence and delay a residential sale at exactly the wrong time.