As an alternative a restrictive covenant can be removed or varied by amending the planning scheme under Part 3 of the Planning and Environment Act 1987 (“The Act”) pursuant to the
schedule to Clause 52.02 of the planning scheme.
• A planning scheme amendment can be requested by anyone but needs to be prepared by the municipal council with the approval of the Minister for Planning.
• pursuant to section 47(1) and subject to some conditions set out in section 47(2) of the Act. Pursuant to section 47(1) of the Act the council has to give notice to all owners and occupiers of land benefited by the restrictive covenant and considers all submissions.
• Like the Property Law option the planning scheme option requires that a notice is placed on the site subject to the application and must be published in the local newspaper.
• The planning scheme method is not usually used to remove covenants on individual lots at the request of the owner, unless other changes to the planning scheme (such as a rezoning of the land) are also proposed.
Sections 60(2) and (5) of the Act set out the relatively strict requirements apply to the granting of a planning permit to remove or vary a registered restrictive covenant.
• Section 60(2) applies to restrictive covenants created on or after 25 June 1991. This section states that a planning permit cannot be granted to remove or vary a registered restrictive covenant unless the responsible authority is satisfied that any benefiting landowner will be unlikely to suffer material detriment, including financial loss or loss of amenity.
• Section 60(5) applies to restrictive covenants created before 25 June 1991. This section provides that a planning permit cannot be granted to remove or vary a restrictive covenant if a benefiting owner has objected, or if there is any chance that a benefiting owner may suffer detriment of any kind (even if that benefiting owner did not object). This test is very stringent and it may be difficult to prove that there would be no detriment.
If the responsible authority refuses to grant a planning permit, like other planning applications the applicant for the permit may apply to the Victorian Civil and Administrative Tribunal (VCAT) for a merits review of the decision. conversely if the council decides in favour of a permit an objector may apply to VCAT for a review of the decision.
The Act sets special rules about planning permit applications for use or development that would breach a registered restrictive covenant.
• Section 61(4) of The Act states a planning permit cannot be granted for something that would result in a breach of a registered restrictive covenant unless a planning permit is also granted to remove or vary the covenant. Meaning a planning permit for use or development to do something is restricted by a covenant then the permit can only be granted if the covenant is removed or varied first or at the same time as the proposed use or development.
• This is governed by section 61(4) of the Act which is constructed to do the following:
o Stop isolated planning permits for use or development without covenant considerations.
o Ensure objectors only need to deal with one application at a time; usually starting with the covenant modification/removal application.
o Any potential breach is stopped at the covenant stage before any planning permit is issued for development or use.
There is little utility in making an application for a planning permit to modify/remove a restrictive covenant unless the applicant is confident of little resistance from those benefiting. For this reason this option is least favoured over the Property Act option outlined earlier.
• The reason for this is the council must consider what detriment would be caused to a benefiting land owner by the removal or variation and has heavy limitations on the granting of a permit set out in section 61(4) of the PE Act apply to an application for removal or variation.
• For example even if a proposed use or development is consistent with the zoning and policies of the planning scheme, but would breach a registered restrictive covenant, then a permit will not be granted if the later receives objections.
Daniel Epstein of Counsel
