It is common for local councils to require a covenant to be registered on a property’s title as a condition for a subdivision. It is a method used to encompass the entire subdivision under one set of rules in order to maintain the quality and standard of the subdivision in one sweeping stroke. The covenant will dictate what an owner or landlord can or cannot do on their land. For instance, a covenant may:
Usually, in a new development, all registered owners are part of a mutual land covenant scheme, which means they all have the same covenant registered on their title and thus, have the same responsibilities. The developer is usually the enforcer of these covenants.
The covenant will often state that the landowner is solely responsible for ensuring that any tenants or guests comply with the rules and that all breaches by the tenant or guests, will allow the developer or other landowners within the subdivision to take necessary action against the landowner. Moreover, the covenant will have an additional clause stating that if the landowner intends to rent the property to tenants, they must include and attach in every tenancy agreement, the actual covenant document. This is the same process should the property be governed by body corporate rules.
The consequences if a covenant is breached is largely dependent on the rules set under the covenant. Generally, if the landowner is to be found in breach, daily rates can reach up to $500. It is best to know the rules before you sign up a tenant. This could prevent a very difficult situation for the tenant who may be breaching the rules through no fault of their own. Ultimately the landowner is responsible.