Easements, caveats and covenants are interests in land that someone other than the owner can rely on. They bind future owners and can decide whether you can extend, subdivide, sell or borrow. Asset Conveyancing reads, creates and removes these interests in South Australia, Victoria, New South Wales, Queensland, Western Australia and Tasmania.
What is the difference between an easement, a caveat and a covenant?
An easement gives another party a right to use part of your land. A covenant restricts what you can do with your land. A caveat is a warning on the title that someone claims an interest, and it blocks most dealings until it is dealt with.
- Easements include rights of way, drainage, sewerage and service easements, usually benefiting a neighbouring lot, a utility or council.
- Restrictive covenants commonly limit the number of dwellings, building materials, fencing or use, often across a whole estate.
- Caveats are lodged by buyers, lenders, beneficiaries, option holders and others claiming an unregistered interest.
How do these interests appear on a title search?
Registered easements, covenants and caveats are listed on the title, usually with the dealing number of the instrument that created them. An easement’s location is usually shown on the plan, and a covenant’s wording is in the instrument.
Some rights, such as certain statutory utility rights and, in some states, easements created by long use, do not appear on the title at all. Our guide on property title searches explains what a search shows.
How do easements and covenants affect value and development?
They can prevent building over part of the land, restrict what can be built or let others onto the property, which affects price and development potential. See the law of easements.
A sewer easement through the middle of a block can rule out an extension or second dwelling. A single dwelling covenant can block a subdivision the planning rules would allow. Buyers should check before signing: see easements in your property contract.
How are easements and covenants created, varied or removed?
They are created by registering an instrument or plan at the land titles office, and varied or removed by agreement of everyone with the benefit or by order of a court or tribunal.
Creating an easement between neighbours needs a signed grant, consent from any mortgagee of the burdened land and a plan showing its location. Removing one by agreement needs a release signed by every benefiting owner, plus mortgagee consents. Without agreement, each state’s property legislation allows an application to modify or extinguish an easement or covenant, typically where it is obsolete or unused, and in some states a covenant can be varied through the planning process. The grounds and forum differ by state.
When can you lodge a caveat?
Only if you claim a caveatable interest in the land, such as a buyer under a contract, a lender under an unregistered mortgage, a trust beneficiary or an option holder. A general money debt is not enough.
State legislation allows an owner to seek compensation from anyone who lodges or keeps a caveat without reasonable cause, so using one as leverage in a dispute carries real risk.
A caveat can stop your settlement. Most dealings, including the transfer to your buyer or a new mortgage, cannot be registered while a caveat remains. Deal with one immediately rather than in settlement week.
How do you remove a caveat?
The simplest way is for the caveator to sign a withdrawal. If they will not, the owner can use their state’s lapsing procedure or apply to court.
Under a lapsing procedure, the land titles office serves notice on the caveator, who must obtain a court order within a set time or the caveat lapses. The steps, notice periods and availability vary by state. An urgent court application needs a solicitor.
What if the problem is a boundary, not a registered interest?
Fences are often off the true boundary, and structures can encroach. A survey identifies the boundary, and the title and plan show what each owner holds. Our guide on boundary disputes explains the options, and our property law services page covers related matters.
Common questions about easements, caveats and covenants
Can I build over an easement?
Usually not without consent. Building over an easement can obstruct the rights of the party who benefits, such as a utility that needs access to a pipe. Some authorities consent to certain structures on conditions, so check before you design.
Do restrictive covenants expire?
Some do. Many estate covenants state an end date or end on a set event, while others continue indefinitely. The registered instrument sets the terms. A covenant with no end date stays in force until it is released by agreement or removed by order.
Can I sell a property with a caveat on the title?
You can sign a contract, but you generally cannot complete the sale while the caveat remains, because the transfer to the buyer cannot be registered. The caveat must be withdrawn, lapsed or removed by court order before settlement, so start as soon as the sale is agreed.
Does an easement reduce property value?
It can. The effect depends on where the easement runs, how wide it is and what it allows. One along a rear boundary may barely matter. One that crosses the best building area, or gives a neighbour access through the yard, can noticeably reduce value and development potential.