Quick Answer
A covenant is a binding rule registered on a property title that restricts or requires specific actions regarding the land. When buying in New South Wales, a title search covenant check is vital because undisclosed restrictions can block renovations, dictate building materials, or enforce ongoing costs on Torrens title homes, strata apartments, and old system land.
Understanding a Covenant NSW
A covenant property title New South Wales entry obliges the current owner to follow certain conditions. These are split into two main types: restrictive and positive.
- Restrictive covenants: Limit what you can do. Common examples include limits to one dwelling per lot, minimum floor sizes, or bans on certain fencing materials.
- Positive covenants: Require you to do something, like maintain a shared driveway or contribute to drainage infrastructure costs.
In NSW, restrictive covenants bind the land automatically. Positive covenants have historically been harder to enforce on Torrens title land without statutory backing, but exceptions exist for council infrastructure and certain community titles. If you ignore these, you risk enforcement action from neighbours or local authorities.
Covenant Risks by Property Type
Torrens Title Homes
For standard Torrens title homes, check the Second Schedule of the title for registered covenants. Developers often place restrictive covenants on new estates to maintain neighbourhood standards. These rules can override standard zoning allowances. Even if the local council approves a development application, a restrictive covenant can legally block the build if a neighbour enforces it.
Strata Apartments
In strata schemes, by-laws function similarly to covenants. While not always listed on the individual lot title, they bind the owner. Search the strata records for renovation by-laws, short-term rental restrictions, and pet prohibitions. Check if the strata scheme has registered a specific covenant on the common property title affecting your lot.
Old System Land
Old system land (pre-Torrens title) carries higher risks. Covenants affecting old system land may exist in historical documents and chain of title deeds rather than a single central register. Tracing these requires searching historical records and old system instruments to confirm whether a covenant runs with the land or is merely a personal agreement between past owners.
How to Check for Covenants
To identify a covenant NSW, you must order the official property records. A Current Title search via TitleFinder provides the current state of the register.
- Order a Current Title / State Lease search: This costs $74.50 AUD through TitleFinder. The report shows the current registered interests.
- Check the Second Schedule: Look for encumbrances listed here. Covenants appear as a specific dealing number or reference to a deposited plan.
- Order the relevant dealing or plan: The title search identifies the covenant exists, but rarely prints the full text. You must order the specific dealing instrument or the instrument attached to the deposited plan detailing restrictions on the use of land to read the exact rules.
If the title shows a caveat, note that a caveat is a warning of a claimed interest, not the interest itself. You must order the underlying instrument the caveat refers to, alongside checking for easements that may also restrict land use.
Practical Buyer Checklist
- Order a Current Title / State Lease search ($74.50 AUD via TitleFinder) early in your cooling-off period.
- Review the Second Schedule for any registered covenants, easements, or caveats.
- Match the dealing number to a specific instrument; order that dealing document to read the full covenant text.
- Check the deposited plan for an instrument detailing restrictions on the use of land.
- For strata apartments, order the strata plan and search the by-laws for renovation and use restrictions.
- For old system land, commission a historical title search to trace the chain of title and historical covenants.
- Discuss the operational impact of any found covenants with your conveyancer or solicitor.
Restrictive vs Positive Covenants
| Feature | Restrictive Covenant | Positive Covenant |
|---|---|---|
| Action required | Prevents an action (e.g., no subdividing) | Requires an action (e.g., maintain shared wall) |
| Enforcement on Torrens Title | Enforceable by parties who benefit (often neighbours) | Harder to enforce without statutory backing |
| Common examples | Single dwelling, brick veneer only, no commercial use | Drainage maintenance, shared driveway costs |
| Where to find details | Second Schedule of title, deposited plan instrument | Second Schedule of title, specific dealing |
Always consult a conveyancer or solicitor to interpret the legal effect of a covenant on your intended use of the property.
Frequently Asked Questions
Can I remove a covenant from a NSW property title?
Removing a covenant requires applying to the relevant authority or court, which is expensive and has no guarantee of success. You must prove the covenant is obsolete, that the benefited land has changed making it irrelevant, or that all benefited owners consent to its removal.
Does a title search covenant report show the full restriction details?
No. A Current Title search lists the existence of the covenant and its registered dealing number. To read the full text of the rules, you must order the specific dealing instrument or the deposited plan's restriction instrument from the official property records.
Are strata by-laws the same as a covenant?
Functionally, they act similarly by restricting what you can do with your lot. However, strata by-laws are registered on the strata scheme's common property title rather than individual lot titles. You must order strata records to review them.
Order the right TitleFinder document
Use this guide as a reference, then order the actual record that answers your question:
- NSW Title Search — $69.90
- NSW Imaged Deposited Plan — $85.90
- NSW Imaged Documents — $91.80
If you are unsure, start with the current title search, then add the plan or instrument if the title points to one.
Need the title search? Use the TitleFinder product links above to order the current title, plan, instrument or state-specific property record you actually need.