Caveats, Covenants & Section 173 Agreements

What information is in a Certificate of Title?

A Certificate of Title shows:

  • the date the certificate was created
  • the legal details of the land
  • the ownership details of any relevant caveats, covenants, Section 173 Agreements and easements
What is a caveat?

A caveat is a note on the Title indicating that a third-party claims rights over the property. For example, a third-party could be a mortgagee.

What is a covenant?

A covenant is a private written agreement between the seller and purchaser. It restricts what the land can be used for. For example, a restriction could limit development to the construction of a single dwelling (house). It could also control the types of materials you can use for new buildings or fences.

Can I change or amend a covenant?

A restrictive covenant is a private treaty or written agreement between land owners that limits the way land can be used and developed. It’s not easy to remove a restrictive covenant from a title. It may take considerable time and money, as the public notification process is extensive, and Council may still refuse the application if it receives certain objections. For more details, visit this guide to restrictive covenants.

What is Section 173 Agreement?

A Section 173 agreement is a written agreement between Horsham Rural City and the landowner. The Agreement sets out conditions or restrictions on how the land can be used or developed. It might also set out to achieve other planning objectives in relation to the land.

A Section 173 agreement is a legal contract registered on the Certificate of Title. Council can enforce it in the same way as a permit condition or the planning scheme.

What is the process for a Section 173 Agreement?
  • We request your solicitors forward a draft copy of the agreement to the Council Planner involved in your application to ensure that all requirements set by the planning permit conditions have been included. Confirmation that the agreement is suitable to process will be directed to your solicitor.
  • Three (3) copies of the agreement, signed by all parties, must then be submitted to Council for signing by our delegate. One copy of the agreement will be sent back to you, one kept by Council and the third copy is forwarded to the Title Registration Service for registration.
  • A fee for Council signing and sealing a Section 173 Agreement is required.
  • Council wait for confirmation of a "dealing number" (formal proof of registration of the agreement on your Title). Notification will be forwarded to you via your representative when this is received.
How do I prepare a Section 173 Agreement?

Section 173 Agreements must be prepared by a legal practitioner. It is at the discretion of the owner to engage someone to prepare the Agreement. An agreement specifies what a person can or cannot carry out. An Agreement will provide for specific requirements set out for Council where a Planning Permit condition may not be enforceable or where there is a specific obligation that is required to run with the Title of the land (so that future landowners are bound by the requirement).

An Agreement may provide for:

  • The prohibition, restriction or regulation of the use or development of the land
  • Conditions which the land may be used or developed for specified purposes
  • Any matters intended to achieve or advance the objectives of planning in Victoria or the objectives of the planning scheme or an amendment to the planning scheme

A Section 173 Agreement may be used:

  • to establish monetary contributions for road construction
  • to prevent the further subdivision of land
  • to provide for the provision of infrastructure
  • to protect native vegetation
  • to provide for maintenance of a facility or property  

The following requirements are set out by the Title Registration Service and should be forwarded to your solicitor to assist in the preparation of an agreement:

  • Attachments must not be included with Agreements. If a reference must be made to a particular plan or permit, simply refer to its reference number, rather than attaching a copy of the document.
  • In some cases, it may be appropriate to attach a diagram or plan. This should be done where only part of the land in a title is affected by the Agreement and the diagram or plan assists in defining the affected part.
  • Any essential attachment must be referred to in the body of the agreement.
How do I change or Amend a Section 173 agreement?

There are two ways to amend an Agreement:

1.   Section 178 of the Planning and Environment Act 1987 allows the amending of an Agreement by agreement between the responsible authority and all persons who are bound by any covenant in the agreement. This section of the Act would normally only be available where the amending of the Agreement is unlikely to be of interest to any other person.

2.   Section 178A allows an owner of land, or a person who has entered into an Agreement under Section 173 in anticipation of becoming an owner of the land may apply to the responsible authority for agreement to a proposal to amend an agreement in respect of that land. The 178A process must be accompanied by the Application Form for Amending or Ending a Section 173 Agreement(DOCX, 41KB) and the relevant fee. The application can only be made by the owner of the land, and not a representative of the owner. The owner could be represented by another person as a contact.

Once an application is made to amend an agreement, the application cannot be amended.

Council then has to consider whether to provide in principle support as required by Section 178A(3).

If in principle support is provided, notice of the application must be given in the manner required by Section 178C of the Act.

Section 178B outlines the matters to be considered in considering the proposal.

Section 178E outlines the decision Council can make on the application.

Note: Council can, on its own initiative, propose to end or amend an agreement.