When Planning Policy Changes — But Your Title Doesn’t
A recent covenant variation approved in Gisborne
Recent planning reforms in Victoria have made it easier to deliver modest additional housing within established residential areas. However, many landowners are discovering that changes to the planning scheme do not automatically override private restrictions on title.
A recently issued planning permit in Gisborne, assessed by Macedon Ranges Shire Council, highlights how restrictive covenants can continue to constrain development — and how they can be lawfully addressed through the planning system.
The ongoing influence of restrictive covenants
Restrictive covenants are commonly found on residential titles created decades ago, often as part of early subdivisions. These covenants frequently impose controls such as:
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minimum dwelling sizes
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limitations on building materials (for example, brick or stone only)
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restrictions on the number of dwellings permitted on a lot
While these controls may once have reflected local expectations, many are now out of step with modern planning policy, contemporary construction methods, and current housing objectives.
Importantly, restrictive covenants operate independently of zoning and overlays. Even where a use or development is supported — or no longer requires a planning permit — a covenant on title can still prevent it from proceeding.
Small second dwellings: policy support, legal constraint
In late 2023, a statewide planning scheme amendment introduced the “small second dwelling” framework across Victoria. In many residential zones, a small second dwelling (up to 60 m²) is now a Section 1 use and may be developed without a planning permit, provided certain conditions are met.
However, these reforms do not override private title restrictions.
If a restrictive covenant prohibits smaller dwellings, imposes minimum floor areas, or restricts construction materials, those provisions remain enforceable unless the covenant is formally varied or removed.
A recent Gisborne permit outcome
In a recent application determined by Macedon Ranges Shire Council, land subject to a 1970s-era restrictive covenant was constrained by requirements relating to:
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minimum dwelling size; and
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prescribed external wall materials.
Although the land was located within an established residential area and current planning policy supported the development of a small second dwelling, the covenant effectively prevented that outcome, despite the policy shift.
A planning permit was therefore sought under Clause 52.02 (Easements, Restrictions and Reserves) to vary the covenant by removing those outdated restrictions. Other elements of the covenant — including provisions relating to vegetation protection — were retained.
Council ultimately granted the permit, being satisfied that:
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the variation would not cause material detriment to beneficiaries of the covenant;
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the restrictions were no longer aligned with contemporary planning policy; and
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the variation would not undermine neighbourhood character or amenity.
The decision demonstrates how covenant variations can be used to bring older titles into alignment with modern planning controls, without opening the door to inappropriate development.
Why covenant variations are becoming more common
As planning policy continues to evolve — particularly in relation to housing diversity and incremental infill — restrictive covenants are increasingly emerging as a separate legal barrier to development.
In practice, this means:
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planning reforms alone may not unlock development potential;
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title reviews are just as important as zoning and overlays; and
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a covenant variation or removal may be required before new policy settings can be relied upon.
This issue is particularly relevant in established townships such as Gisborne, where older subdivisions are common and planning policy is increasingly focused on efficient use of existing residential land.
What this means for landowners
If you’re considering development on residential land, it’s important to check early:
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whether your title contains a restrictive covenant;
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what that covenant actually restricts; and
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whether those restrictions conflict with the current planning scheme.
In many cases, a carefully prepared covenant variation application can modernise title controls while still protecting legitimate interests and neighbourhood amenity.