How to Remove a Restrictive Covenant on Land in South Australia

The Legal Reality: Planning Approval vs. Private Covenants

Many developers and landowners in Adelaide identify what seems to be a prime development site—a large allotment in an established suburb—only to discover a historical restrictive covenant, typically registered on the Certificate of Title in the form of an "Encumbrance". These historical covenants frequently contain "single dwelling" clauses, prohibiting the construction of more than one residential home on the land.

A common misconception among South Australian property buyers is that securing planning consent under South Australian planning legislation automatically overrides private covenants. In South Australia, planning authorities assess applications against the Planning and Design Code. They generally do not enforce or investigate private covenants during the assessment process. However, obtaining planning approval does not extinguish a covenant. If you proceed to build multiple dwellings in breach of a restrictive covenant, any beneficiary (typically neighbouring landowners within the original subdivision) can seek an injunction in the Supreme Court to halt construction or demand demolition. Therefore, the covenant must be legally removed or varied before physical development begins.

Path 1: Extinguishment by Mutual Consent

The most direct, though often practically challenging, method to remove or vary a covenant is by obtaining the written consent of all beneficiaries. Beneficiaries are the owners of the land that benefits from the restriction (usually the remaining lots of the original parent title subdivision).

This process typically involves the following steps:

• Title Searches: Identifying all current beneficiaries through historical title searches to trace the original subdivision.

• Drafting the Deed: Engaging a legal practitioner to draft a Deed of Extinguishment or Variation.

• Securing Signatures: Obtaining formal signatures from every single beneficiary (and potentially their mortgagees, such as financial institutions, where applicable).

• Registration: Lodging the application with Land Services SA to formally update the Certificates of Title.

The primary risk of this path is that if even one beneficiary refuses to sign, or cannot be located, the application cannot proceed. Consequently, this method is generally only viable when there are very few beneficiaries involved.

Before pursuing either formal removal pathway, a more prudent first step is to have a property lawyer assess whether the covenant actually binds the current registered proprietor at all.

In Deguisa v Lynn [2020] HCA 39, the High Court of Australia held that under section 69 of the Real Property Act 1886 (SA), a registered proprietor's title is "absolute and indefeasible" subject only to encumbrances that are "sufficiently notified" on the Certificate of Title. In that case, a "common building scheme" covenant that did not specifically identify the benefiting lots on the Certificate of Title or the memorandum itself was held not to bind the registered proprietors.

This has significant implications for many historical "single dwelling" covenants across South Australia: where the original registration did not specifically identify the benefiting lots on the title, the covenant may not bind the current owner at all — meaning neither Path 1 nor Path 2 below may even be necessary to lawfully proceed with development.

Path 2: Supreme Court Application

When unanimous consent is unachievable, the alternative is applying to the Supreme Court of South Australia. Unlike some other jurisdictions, South Australia does not have a broad, simplified statutory provision specifically designed for the modification of covenants. Instead, applicants must rely on common law principles, equity, or specific arguments under relevant South Australian property legislation and the inherent jurisdiction of the Court.

To succeed in such an application, the applicant generally must prove to the Court that:

• The covenant is obsolete: Due to changes in the character of the neighbourhood or other circumstances, the original purpose of the restriction can no longer be fulfilled (e.g., the surrounding area has already been widely subdivided).

• No substantial injury: The proposed variation or discharge will not cause substantial injury to the persons entitled to the benefit of the restriction.

• Implied agreement: The beneficiaries have agreed (either expressly or by implication through their actions or omissions) to the covenant being discharged.

This is a highly technical legal process requiring expert planning evidence and experienced legal representation. It carries significant cost risks and potential delays, particularly if neighbouring beneficiaries formally oppose the application in court.

Practical Due Diligence for Developers

Given the complexities of both paths, developers should undertake rigorous due diligence before committing to a site:

First, review the Certificate of Title and all registered instruments (including any "encumbrance" or "covenant") during the cooling-off period or prior to auction. Second, engage a qualified conveyancer or property lawyer to identify the exact boundaries of the benefiting land and the number of potential beneficiaries. Third, assess the neighbourhood character; if the surrounding streets have already been widely subdivided and redeveloped with multiple dwellings, the argument for "obsolescence" in a court application may be stronger. Finally, incorporate covenant removal contingencies into purchase contracts where feasible, though vendors in competitive markets may resist conditional clauses.

Conclusion

Removing a restrictive covenant in South Australia is rarely straightforward. While beneficiary consent is the cleanest route, the Supreme Court remains the ultimate arbiter when negotiations stall. Developers must carefully weigh the legal costs and potential project delays against the projected uplift in land value, and should always seek specialised legal counsel before proceeding with such acquisitions.

Sources

• Law Handbook SA — Easements and Covenants (lawhandbook.sa.gov.au)

• Deguisa v Lynn [2020] HCA 39 (hcourt.gov.au — full judgment)

• Real Property Act 1886 (SA), s 69

Illustrative image only — not a photograph of a Cyberate PM project. Photo by Atlantic Ambience on Pexels.