Covenants and Restrictions on Your Property: NZ Guide

Covenant instruments can contain detailed controls on buildings, appearance, structures, animals or land use. The applicable controls must be checked in the registered instrument rather than assumed from examples.

LINZ says land covenants are noted on the register under the Property Law Act 2007 and Land Transfer Act 2017. A developer can put a mutual covenant scheme in place before lots are sold; once included in the new titles, it binds future purchasers. The instrument defines the burden, benefit and conditions.

Types of Property Covenants

Restrictive covenants are the most common type. They prohibit certain uses or activities on the land. A restrictive covenant might prevent you from building more than one dwelling, running a commercial business, keeping livestock, or erecting certain types of fences.

Positive covenants require you to do something rather than refrain from doing something. They might require you to maintain fencing, contribute to shared costs, or keep buildings in good repair. Positive covenants are less common and can be harder to enforce.

• Minimum house size or value requirements
• Building materials and exterior colours requiring approval
• Fence types, heights, and materials
• Prohibition on certain animals (chickens, pigs, bees)
• No commercial vehicles parked on street or driveway
• No caravans, boats, or trailers visible from the street
• Single residential dwelling only, no minor dwellings
• Design approval required before building

Land covenants may benefit and burden land, and the Land Transfer Act 2017 also permits a covenant in gross for the benefit of a specified person or legal entity. Check the registered instrument for the benefited and burdened parties or land.

Consent notices under the Resource Management Act are similar to covenants and appear on titles. They arise from resource consent conditions and may require specific building configurations, materials, noise mitigation, or other measures.

Who Can Enforce Covenants?

This is a crucial question. Covenants are only as powerful as someone's willingness and ability to enforce them.

Mutual covenant schemes often make lots both burdened and benefited, but the arrangement varies. The registered instrument must be checked to identify who has the benefit and may be entitled to enforce it.

A covenant may benefit land or, for a covenant in gross, a specified person or legal entity. Do not assume a body corporate, residents’ association or developer can enforce it without checking the instrument and its authority.

A lack of immediate enforcement does not vary or revoke a registered covenant. Existing or proposed non-compliance can create legal and sale due-diligence issues, so obtain advice about the instrument and the specific facts.

Consequences of Breaching Covenants

A person entitled to the benefit may seek court remedies for a breach. The available remedy—such as an injunction, damages or another order—and whether work must be altered or removed depend on the instrument, evidence and court decision.

Covenant litigation can involve damages, injunctions and legal costs, but liability and costs are decided on the particular claim. Get legal advice promptly if a breach is alleged.

A known or suspected breach may affect a sale, finance or buyer due diligence. Disclosure, remedy and any insurance response are fact- and policy-specific; obtain legal and insurer advice rather than assuming an outcome.

Working Within Covenants

The smart approach is to understand your covenants before you do anything that might breach them. Get copies of all covenant instruments registered on your title. Read them carefully. If anything is unclear, get legal advice before proceeding.

Many covenants allow variations with approval. If you want to paint your house a colour outside the approved palette, you may be able to get consent from the body corporate or relevant approving authority. Some covenant schemes have design review panels that consider requests relatively quickly.

Apply for approval before starting work, not after. Retrospective approval is harder to obtain, and you may have already spent money that you cannot recover if approval is refused.

Modifying or Removing Covenants

Covenants can be modified or removed, but the process depends on how the covenant is structured.

LINZ says variation or revocation instruments must be executed by the registered owners of the burdened land and benefited land, or the person benefiting from a covenant in gross. A chargeholder or caveator of benefited land must also consent. The required parties depend on the register and instrument.

Section 317 of the Property Law Act 2007 gives the High Court jurisdiction to modify or extinguish land covenants on specified statutory grounds. It is not an automatic process, and notice, evidence, possible compensation and the court’s discretion can matter. Obtain specialist legal advice on the current section and the particular covenant.

A covenant instrument may contain an expiry or other duration provision, but there is no universal 10- or 20-year term. Check the instrument and current register; do not assume a covenant has expired or been extended.

Covenants and Building Consents

A common misconception is that obtaining a building consent means you can proceed with construction regardless of covenants. This is wrong. Council building consent processes and private covenants are entirely separate systems.

Council assesses whether your proposed building complies with the Building Code and district plan. They do not check whether it complies with private covenants registered on your title. You can receive building consent for a structure that completely violates your covenants, and if you build it, you face enforcement action just the same.

Similarly, getting covenant approval does not mean you have building consent. You need both. Many projects have failed because owners obtained one but not the other.

Buying Property with Covenants

When purchasing property, review all covenants as part of your due diligence. Do not just skim the title; actually read the covenant instruments. Consider whether the restrictions align with how you want to use the property.

If you plan to add a minor dwelling, check whether covenants allow it. If you work from home, check whether commercial activity restrictions might affect you. If you have pets or want a particular style of fence, check whether covenants allow them.

Consider covenant limitations when assessing whether a property suits the intended use. Any effect on value is property- and market-specific and may require valuation and legal advice.

The Value of Covenants

Mutual covenant schemes commonly restrict land use or building styles. Their practical effect can be protective or restrictive depending on the wording, enforcement and owner’s intended use; they do not guarantee property values.

Think of covenants as a shared agreement among neighbours about standards. They work best when everyone understands and respects them. They become problems when people ignore them or feel they apply to everyone except themselves.

Living with covenants successfully means understanding what you agreed to when you purchased and working within those boundaries. For most homeowners most of the time, covenants are background rules that never become issues. The problems arise when someone decides to test the limits without understanding the potential consequences.