Building Covenant is very crucial in a Property Deed. Property Lawyers use this provision to limit the use of Property prohibiting certain uses. Only a Lawyer or Law firm specialised in Real estate & Development can provide appropriate guidelines and advice in building Covenant. (Source: Usher Levi Lawyers http://www.usherlevi.com.au/)

1. Building Covenants and How These May Affect You | Commercial Lawyers in Brisbane
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Building Covenants and How These May Affect You
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03-07-2013 0 comment
A building covenant is restrictive covenant and strictly defined a restrictive covenant is a provision in a deed limiting the use of the property and prohibiting certain
uses. 1The term is also used to describe a promise contained in any contract or agreement relating to land. 2Please keep in mind that each case relating to a
building covenant will need to be taken on a case by case basis and the analysis of the facts and circumstances will play an important part for you obtaining the
correct advice and guidance from the appropriate law firm with a lawyer who specialises in real estate and development, and more particularly one who specialises
in building covenants.
Scheme of Development
A building covenant may become an issue in circumstances where you purchase a property (house or vacant land) in, for example an ‘estate’ development and the
other registered owners of the development purport that a form of scheme of development exists therefore binding you to the original covenant. For such a
scheme to exist there must be specific requirements that are satisfied. In the event that the required matters are established then a buyer is entitled, in equity, to
enforce a restrictive covenant entered into by their predecessor in title with the common seller (being a developer) irrespective of the dates of the respective
purchases. If such circumstances were in existence then a specialised property lawyer would need to analyse whether a scheme of development is, in fact, in
existence but the essential requirements appear to be that there must exist an intention between the developer and respective buyers that they are all subject to
mutually enforceable covenants which create a “local law” for the relevant development estate.
Restrictive Covenants
A developer designing a new estate will commonly require buyers to enter into restrictive covenants; however, in practice such covenants are not generally
enforced against any one other than an original covenantor. It has been the generally accepted view for many years that restrictive covenants are not registerable
and there is a real doubt as to whether a scheme of development would be enforceable against a subsequent buyer.
There are a couple of pertinent questions for a subsequent registered owner to ask themself (i) has the building covenant been registered on the land (ii) was notice
given of the building covenant prior to entering into the contract of sale for the land?
Fraud or Acceptance of Building Covenant
There are well established common law principles that that the burden of a covenant does not run with the land at law. However, equity may enforce the burden of
a restrictive covenant against a successor in title to the original covenantor in certain circumstances including where a scheme of development is established and it
is generally accepted that one has the right to enforce a restrictive covenant which gives rise to an equitable interest in the covenantor’s land.
In some circumstances, however, although a person may be a subsequent registered owner of the land to which the building covenant applied the person may
have purchased the land at the current market value and in good faith without having any notice of the building covenant. Therefore it may be that the building
covenant will not be enforceable against the subsequent registered owner and, arguably, this would be the case whether the subsequent registered owner had
been given notice of the building covenant or not. There are exceptions to this opinion in the event that there has been fraud or the in personamexception.
If there has been no fraud and the subsequent registered owner has not freely entered into the Building Covenant, the subsequent registered owner therefore may
not be bound by any action that they have taken in accepting the building covenant and, therefore, the in personam exception may not apply in certain
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2. Building Covenants and How These May Affect You | Commercial Lawyers in Brisbane
circumstances.
Enforceability of Building Covenant
Based on the presumptions in this article, it is clear from the common law principles and relevant legislation that a subsequent registered owner of the land, to
which the building covenant relates to the original covenantor, will not be bound by the building covenant. In the event that a subsequent registered owner had
purchased the land with notice of the building covenant but did not expressly agree to it then the subsequent registered owner would also have strong grounds to
claim that they are not bound by the building covenant.
This article or the information contained therein does not purport to provide a full explanation of the law, give advice or any guidance to anyone in connection with
any building covenant or other issue and this article is not to be used by anyone to support their legal position or otherwise. This article is provided on the basis of
the assumption of particular facts and circumstances. For clarification purposes and further to the above this article does not purport to be advice in relation to
local planning and development advice nor is it advice or guidance on any local authority regulations or other building regulations or codes. This article is limited
only to what is the generally accepted view in Queensland in regard to whether building covenant would be enforceable against a subsequent buyer. This firm
cannot take responsibility for any action readers take based on this information. We would be happy to assist you with any property, real estate, development,
building, construction and engineering related legal issues you may have, please get in touch via enquiries@usherlevi.com or telephone our Brisbane office on (07)
3087 3463 or Sunshine Coast office on (07) 5413 9270 and one of our experienced property lawyers or construction lawyers will respond to you.
1
Black, Blacks Law Dictionary (6th ed, West Publishing Co., 1990), p 1315.
2
Butt, Land Law (6th ed, Sydney, Butterworths, 2010), [17 02].
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