Quick Answer: A covenant on a NSW property title is a registered restriction or obligation that binds the current and every future owner. Before committing to a purchase, order a current title search through TitleFinder ($74.50 AUD) to identify covenant references, then obtain the full instrument or dealing to read the exact terms. Covenants can block renovation plans, restrict land use, or impose ongoing costs — and they survive settlement.
What Is a Covenant on a NSW Property Title?
A covenant is a condition recorded on a property title that either restricts what the owner can do (restrictive covenant) or requires the owner to do something (positive covenant). Once registered on the title, it runs with the land — meaning it applies to every future owner, not just the person who originally agreed to it.
On a NSW title, covenants appear as notations with reference numbers pointing to the full document. The title itself rarely spells out the details; you must retrieve the underlying dealing or instrument to read the actual conditions.
Common Covenant Types in NSW
Buyers in NSW typically encounter these categories:
- Building covenants: Restrict the size, height, materials, or style of structures. Common in newer estates and heritage overlay areas.
- Subdivision covenants: Prohibit or restrict further subdivision of the lot.
- Use restrictions: Limit the property to residential use, prohibit certain businesses, or ban specific activities.
- Positive covenants: Require the owner to maintain a shared driveway, retaining wall, or drainage infrastructure. These carry ongoing cost obligations.
- Section 88B instruments: Covenants created as part of a deposited plan, often covering drainage, landscaping, or building envelopes in newer subdivisions.
How to Find Covenants on a Title
A current title search will list any registered covenants in the interests or notations section. Look for entries prefixed with "C" or described as a covenant. Each entry includes a reference number — this is the key to retrieving the full terms.
The title search alone is not enough. You must order the associated dealing or instrument to understand what the covenant actually requires or prohibits. Without reading the full document, you cannot assess whether the property suits your plans.
What to Check: A Practical Checklist
- Identify every covenant reference on the title. A single property can carry multiple covenants from different periods.
- Order the full dealing or instrument for each reference. This is the only way to read the exact wording and scope.
- Check whether the covenant restricts your intended use — renovation, extension, demolition, subdivision, or operating a business from the property.
- Check for positive covenants with financial obligations. Shared infrastructure maintenance can cost thousands per year.
- Verify whether a Section 88B instrument applies and cross-reference it with the deposited plan for the lot.
- Assess enforceability. Older covenants, particularly on old system land, may be difficult to enforce — but never assume they are void without proper legal advice.
- Check easements and caveats alongside covenants. These often appear together on the same title and compound restrictions on the property.
Document Reference Guide
| Document | What It Shows | When to Order |
|---|---|---|
| Current title search | Covenant reference numbers, easement notations, caveat warnings | Always — this is your starting point |
| Dealing / Instrument | Full covenant text, conditions, and obligations | When any covenant reference appears on the title |
| Section 88B Instrument | Covenants attached to a deposited plan, often covering building envelopes and drainage | When the lot is in a newer subdivision |
| Deposited Plan | Lot dimensions, easement locations, and plan-related covenant areas | When a Section 88B applies or boundary details matter |
| Historical title search | Prior title dealings that may reveal older covenant origins | When investigating old system land or unexplained restrictions |
Old System Land: A Higher Risk for Hidden Covenants
Old system (pre-Torrens) titles in NSW present a specific risk. Covenants may be buried in the chain of title documents rather than clearly listed on a single folio. If the property has not been converted to Torrens title, a standard title search may not reveal every obligation. Buyers should consider ordering historical searches to trace the chain of title and identify any surviving covenants.
Old system land is more common in established Sydney suburbs and regional areas. If the title search indicates "Old System" or "Limited Title", treat the covenant review as essential, not optional.
Strata Apartments and Covenants
In strata schemes, by-laws function similarly to covenants and can restrict renovations, flooring types, pet ownership, and short-term letting. While by-laws are not technically covenants on the title, they produce the same practical effect: they control what you can do with the property. Always review the strata by-laws alongside the title search for any unit or apartment purchase.
Torrens Title Homes
Most freestanding houses in NSW are under Torrens title, where covenants appear directly on the folio. This makes them easier to identify but not easier to remove. A restrictive covenant on a Torrens title lot can only be removed or modified through an official process — it cannot be ignored or overridden by a later owner.
When Covenants Intersect with Easements and Caveats
Covenants rarely exist in isolation. A title search may reveal easements that restrict building over drainage lines, and caveats that signal competing interests. Each of these elements compounds the restrictions on the property. Order the title search early in your due diligence so you have time to retrieve all related documents before committing to the purchase.
Frequently Asked Questions
Can a covenant be removed from a NSW title?
A registered covenant can sometimes be removed or modified through an application to the relevant authority, or by agreement with the parties who benefit from it. This is not automatic and can be expensive and time-consuming. Never assume a covenant can be removed after purchase.
Does a covenant expire automatically?
Most restrictive covenants on NSW titles do not have an expiry date. They remain on the title indefinitely unless formally removed. Some older covenants may become unenforceable over time, but this is a legal question that depends on the specific circumstances — do not rely on this assumption without obtaining proper advice.
What is the difference between a covenant and an easement?
A covenant restricts or requires actions by the property owner, such as a building height limit or a maintenance obligation. An easement gives someone else the right to use part of your land, such as a right of way or a drainage easement. Both appear on the title and both deserve close attention during due diligence.
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.
