What is a restrictive covenant on a Victorian property?

A restrictive covenant is a rule attached to the land. It might restrict what can be built, where it can be built, what materials can be used, or how the land can be used. The important point is that the covenant belongs to the land rather than the person who originally agreed to it, so when you buy the property the restriction can come with it. Many were created decades ago when the land was first subdivided, and age alone does not necessarily make a covenant irrelevant.

What kinds of restrictive covenants show up most often?

Across the 357 contracts with a covenant, Prepared recorded 215 standard restrictive covenants with no breach disclosed, 61 restricting excavation or the removal of earth, stone, clay, gravel or sand, 41 applying through a Memorandum of Common Provisions, 33 older covenants containing historical restrictions, and 12 modern estate covenants with detailed design requirements. Some contracts contained more than one type, so the categories overlap and cannot be added together.

Can a restrictive covenant stop me excavating or putting in a pool?

It can. Prepared found 61 contracts containing older covenants restricting the excavation or removal of earth, stone, clay, gravel or sand. These are old restrictions, and the original concern may have been quarrying or brickmaking rather than anything common in today's suburbs, but the wording is what applies. A buyer planning excavation work should check the covenant before committing.

What do modern estate covenants restrict?

Prepared found 12 contracts with modern estate-style covenants containing detailed design requirements. These can regulate the size and position of the house, setbacks, fence heights and materials, external finishes, the amount of brick required, what can be visible from the street, caravans and other vehicles, and external plumbing. Buyers in a new estate may expect some design rules, but these covenants can also govern surprisingly ordinary decisions.

What is a single dwelling covenant and why does it matter?

Some covenants restrict a property to one dwelling. For a buyer who simply wants a family home that may never matter. For someone who eventually wants to subdivide, build a second dwelling, add a granny flat or redevelop the block, it could be very important. This is why a covenant should be read against your plans rather than in isolation — a restriction that is irrelevant today can become significant five years from now.

What should I do if a contract discloses an existing breach of a covenant?

Prepared found 16 contracts disclosing an existing breach involving covenants, easements or other restrictions. If you are buying one of those properties, you would want to understand what the breach is, who is responsible for fixing it, what fixing it would involve, and what happens if it is not fixed. This is the sort of issue that deserves attention before an offer is made.

What question should a buyer ask about covenants before buying?

Buyers tend to ask what they can do with the house. The better question is what they can legally do with the land. Those are not always the same thing — the existing house might be perfectly compliant while your future plans are not.

5 min read

One in four Victorian properties carries a restrictive covenant

Picture of Lindel Enticott Lindel Enticott Updated on September 10, 2026

Victoria Buying Contract Review

From 1,358 Victorian contracts of sale

One in four Victorian properties carries a restrictive covenant

You can buy the house you love and still discover you can't do what you want with it.

26%

357 of the 1,358 contracts we reviewed carried a restrictive covenant.

The house has the backyard you've been looking for.

There's room for a pool.

The garage could become a home office.

You could extend out the back.

Maybe you want to build a second dwelling one day.

Then, after you've bought the property, your builder pulls the title and says:

“Have you seen the covenant?”

You haven't.

It was sitting in the contract all along.

We reviewed 1,358 Victorian contracts of sale and found a restrictive covenant in 357 of them — 26%.

That's roughly one in four properties.

And the surprising part isn't that covenants exist.

It's how often they can affect things buyers assume they'll be free to do with their own property.

What is a restrictive covenant?

In simple terms, a restrictive covenant is a rule attached to the land.

It might restrict what can be built, where it can be built, what materials can be used, how the land can be used, or what you can do with it.

The important thing is that the covenant belongs to the land, not the person who originally agreed to it.

So when you buy the property, the restriction can come with it.

It may have been created decades ago, when the land was first subdivided.

It may have been written when the neighbourhood looked completely different.

It may even contain wording that sounds bizarre today.

But if it still applies, its age doesn't necessarily make it irrelevant.

Here's the mistake buyers often make

They look at the property and ask

“What can I do with this house?”

The better question is

“What can I legally do with this land?”

Those aren't always the same thing.

The existing house might be perfectly compliant.

Your future plans might not be.

And that's where restrictive covenants can become expensive.

What we found in 1,358 contracts

Our lawyers identified restrictive covenants in 357 contracts.

Within those, we saw a surprisingly broad range of restrictions:

What the covenant did

Contracts

Standard restrictive covenant, with no breach disclosed

215

Restrictions on excavation or removal of earth, stone, clay, gravel or sand

Covenant applying through a Memorandum of Common Provisions

Older covenants containing historical restrictions

Modern estate covenant with detailed design requirements

Total contracts with a restrictive covenant

357 of 1,358

Some contracts contained more than one type of restriction, so the categories overlap.

The important number is 357.

One in four.

Three covenants we'd want a buyer to know about

Not all covenants are created equal.

Some may have virtually no impact on your plans.

Others can completely change what you can do with the property.

Three types particularly caught our attention.

Covenant 01

contracts restricting excavation or the removal of earth, stone, clay, gravel or sand

The covenant that could affect your excavation plans

We found 61 contracts containing older covenants restricting the excavation or removal of things such as earth, stone, clay, gravel or sand.

These are old restrictions.

Some date back to a very different era, when the concern may have been quarrying, brickmaking or other activities that aren't exactly common in today's suburbs.

But the wording doesn't automatically disappear just because the reason for creating it has disappeared.

And excavation is something modern homeowners do all the time.

A pool. A basement. Major landscaping. Cutting into a sloping block. Significant earthworks.

Suddenly, an old sentence written decades ago can become relevant to a very modern renovation.

What we'd want a buyer to know

If your plans involve digging, check the title before you buy.

Don't wait until you've paid for architectural drawings and your builder is ready to start.

Covenant 02

properties where restrictions applied through a Memorandum of Common Provisions

The covenant that's not actually written on the title

This one is particularly easy to miss.

We found 41 properties where restrictions applied through a Memorandum of Common Provisions.

The title may contain a reference to a document.

But the actual restrictions aren't necessarily spelled out there in full.

So you read the title.

You see the reference.

You move on.

And you may never discover what the document actually says.

These arrangements are particularly common in estates where the same restrictions apply across multiple properties.

They're perfectly capable of doing their job.

They're just not particularly good at announcing themselves to a buyer.

What we'd want a buyer to know

If the title points you to another document, read that document.

A reference number isn't an explanation.

Covenant 03

older covenants containing historical restrictions

The covenant that sounds ridiculous — but is still there

Some of the oldest covenants we encountered read like pieces of property history.

Restrictions referring to building values in pounds.
Bans on certain trades.
Restrictions relating to activities that haven't been common in a residential suburb for generations.

It's tempting to dismiss them as historical curiosities.

But a covenant doesn't necessarily stop mattering just because it sounds old-fashioned.

What we'd want a buyer to know

Don't judge a covenant by how strange it sounds.

Work out whether it still applies and whether it affects what you want to do.

Then there are the modern covenants

Older covenants aren't the only ones buyers need to understand.

We also found 12 contracts with modern estate-style covenants containing detailed design requirements.

These can regulate things such as:

the size and position of the house
setbacks
fence heights and materials
external finishes
the amount of brick required
what can be visible from the street
caravans and other vehicles
external plumbing
even where certain household items can be seen

In some ways, these are easier for a buyer to understand.

They're newer.

They're detailed.

And buyers purchasing in a new estate may expect some design rules.

But they can also regulate surprisingly ordinary decisions.

The fence you want to build.

The extension you're planning.

The materials you want to use.

The caravan you want to park at home.

A covenant doesn't have to stop you building a house to matter.

Sometimes it simply stops you building the house you want.

One dwelling can be the most important restriction of all

Some covenants restrict a property to one dwelling.

For a buyer who simply wants a family home, that might never matter.

For someone who eventually wants to:

subdivide
build a second dwelling
add a granny flat
redevelop the block

…it could be very important.

And this is why we don't think buyers should read a covenant in isolation.

Read it against your plans.

A restriction that's irrelevant today can become very important five years from now.

contracts disclosed an existing breach involving covenants, easements or other restrictions

Sixteen properties were already disclosed as being in breach

We also found 16 contracts that disclosed an existing breach involving covenants, easements or other restrictions.

That's a relatively small number.

But if you're the buyer of one of those properties, the percentage doesn't matter very much.

What matters is that you're potentially buying a property with an existing problem.

Before proceeding, you'd want to understand:

What is the breach?

Who is responsible for fixing it?

What would fixing it involve?

What happens if it isn't fixed?

This is exactly the sort of issue that deserves attention before an offer is made.

Know what you can do with the land before you buy the house.

Send us your contract.

A Prepared property lawyer will review it the same day, for free, and explain any covenants on the title, what they restrict, and whether they affect the plans you have for the property.

Send us your contract

How we found this

This analysis is based on 1,358 Victorian contracts of sale reviewed by Prepared property lawyers between February and August 2026, across metropolitan Melbourne.

A finding was counted where a qualified reviewer identified the issue and it appeared in the published contract review.

The figures represent covenants and restrictions disclosed in the contracts and associated documents reviewed by Prepared. Some contracts contained more than one type of restriction, so categories overlap and cannot be added together.

This analysis describes what appeared in the contracts reviewed and should not be taken as legal advice for a particular transaction.

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One in four Victorian properties carries a restrictive covenant

One in four Victorian properties carries a restrictive covenant

What is a restrictive covenant?

Here's the mistake buyers often make

What we found in 1,358 contracts

Three covenants we'd want a buyer to know about

The covenant that could affect your excavation plans

The covenant that's not actually written on the title

The covenant that sounds ridiculous — but is still there

Then there are the modern covenants

One dwelling can be the most important restriction of all

Sixteen properties were already disclosed as being in breach

Know what you can do with the land before you buy the house.

One in four Victorian properties carries a restrictive covenant

The average Victorian contract of sale is now 92 pages

1 in 11 homes we reviewed had building works with no permit