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Restrictive covenants in NSW — will one stop your development?

NSW is different. In Victoria a covenant can flatly block a permit; in NSW, a clause buried in almost every council's LEP — clause 1.9A — suspends many private covenants for development approved under the planning system. But it has real exceptions, it doesn't clean your title, and sometimes you still need the Supreme Court. Here's how it actually works, and the reform now on the table.

NSW owners, buyers and developers whose plans — a dual occupancy, a granny flat, townhouses, a subdivision — have run into a restriction on the title or the 88B Instrument, and who want to know whether it actually bites.

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Where NSW covenants live: the title and the 88B Instrument

In NSW, most restrictions on what you can build arrive with the subdivision that created your lot. When a plan is registered, a Section 88B Instrument is registered with it, setting out the easements, restrictions on the use of land and positive covenants that apply to each new lot — with a table showing exactly which lots are burdened and which benefit. Older estates carry covenants in transfer documents instead. Classic examples: one dwelling only, minimum dwelling size, external materials, no further subdivision.

The critical first step in any covenant question is reading the actual instrument. Most owners have never seen their 88B — and its precise wording decides everything that follows, including whether the suspension clause below can help you.

The NSW twist: clause 1.9A can suspend the covenant for approved development

Nearly every council's Local Environmental Plan contains clause 1.9A — 'Suspension of covenants, agreements and instruments'. Its effect (quoting the Sydney LEP 2012 version): 'for the purpose of enabling development on land in any zone to be carried out in accordance with this Plan or with a consent granted under the Act, any agreement, covenant or other similar instrument that restricts the carrying out of that development does not apply to the extent necessary to serve that purpose.'

In plain English: a purely private covenant is generally not a legal bar to the granting of development consent, or to carrying out the development that consent approves. This is why a 1920s 'one dwelling only' covenant frequently does not stop a dual occupancy DA in an R2 zone where the Housing SEPP and LEP make dual occupancies permissible. It is close to the opposite of the Victorian position, where legislation currently prohibits permits that would breach a covenant.

But clause 1.9A has hard limits, and they matter:

Covenants imposed by the council, or that the council required, are NOT suspended — and these are common in newer estates
Instruments protecting public interests are excluded: Crown land instruments, conservation agreements, biobanking/biodiversity agreements, property vegetation plans, planning agreements (VPAs)
The rights of public authorities under registered instruments are preserved
Each council's LEP has its own clause 1.9A — wording and carve-outs vary (Sydney's, for example, excludes land in Central Sydney), and a handful of instruments differ — so the clause must be checked in YOUR LEP
It suspends the covenant only 'to the extent necessary' for the approved development — it does not remove the covenant from your title, and it does nothing for works outside a consent

When you still need real removal: s89 of the Conveyancing Act

Suspension is not the same as removal. The covenant stays on title — visible to every future buyer and their bank, still relevant to anything you do outside an approved consent, and still a cloud if it was imposed by council (where 1.9A doesn't help at all). Permanent removal or variation takes either the consent of every benefited owner (registered as a dealing — rarely achievable across a whole estate) or an order of the Supreme Court under section 89 of the Conveyancing Act 1919.

The Court can modify or extinguish a restriction on any of these grounds: the covenant ought to be deemed obsolete because the neighbourhood's character or the benefited land's use has changed; its continued existence would impede the reasonable use of your land without securing practical benefit to those entitled to it; the benefited owners have agreed, or by their acts or omissions can reasonably be considered to have abandoned or waived it; or the proposed modification or extinguishment will not substantially injure the persons entitled to the benefit. Section 89 proceedings are effective but genuinely legal work — expect a barrister, evidence about the estate's history, and real cost.

The proposed NSW reform: obsolete covenants and sunset dates

NSW is also looking at making old covenants easier to clear. The Office of the Registrar General has released a discussion paper proposing to expand the class of 'obsolete' covenants — including deeming certain covenants obsolete after 12 years — to simplify or remove the notice requirements for clearing obsolete covenants from title, to impose expiry (sunset) dates on new covenants, and to expand the Supreme Court's powers to extinguish restrictions.

Be clear about the status: this is a consultation, not law. No bill has been introduced and no implementation date exists. If it proceeds, clearing a genuinely outdated covenant could become an administrative process rather than a Supreme Court application — but until then, the pathways above are the law. (Victoria, by contrast, has already legislated its covenant reform — commencing by late 2027.)

What to do before you design anything

Start with the documents. Our NSW Full Planning Pack ($105) delivers the Certificate of Title, the Plan of Subdivision and the 88B Instrument — the exact material that shows every covenant and restriction on your lot and which neighbours hold the benefit. Add the AI Title Restrictions Review (+$30) for a plain-English read of every restriction with its development implications spelt out.

Then check the planning side: the free NSW Property Snapshot shows your zone and key controls, and tells you whether the development you want is permissible in the first place — because clause 1.9A only helps development the planning system would approve. From there, the strategy question (rely on 1.9A, seek consents, or run s89) is one our planners can map with you.

Real example

Worked example — the 1930s single-dwelling covenant

A 'one main building only' covenant from a 1935 transfer, on an R2 lot in a council whose LEP contains the standard clause 1.9A, where the owner wants a dual occupancy: the covenant is private (not council-imposed), so it is suspended for the DA and doesn't block consent or construction. It remains on title — so the owner later asks the Supreme Court under s89 to extinguish it as obsolete, pointing to the changed character of a street now full of dual occupancies. Contrast: the same wording imposed by the council as a condition of a 2015 subdivision is NOT suspended — the covenant bites regardless of zoning.

The statutory basis

Clause 1.9A appears in each council's Local Environmental Plan under the Standard Instrument; the version quoted here is clause 1.9A of the Sydney Local Environmental Plan 2012, made with the Governor's approval under what is now section 3.16 of the Environmental Planning and Assessment Act 1979. Court-ordered modification and extinguishment is section 89 of the Conveyancing Act 1919 (NSW). The 88B Instrument regime is section 88B of the same Act. The obsolete-covenant proposals are from an Office of the Registrar General discussion paper and are under consultation only — they are not law. This page is general information, not legal advice: the wording of your covenant and of your council's clause 1.9A governs everything.

Standard Instrument LEP, cl 1.9A (e.g. Sydney LEP 2012)

Suspension of covenants for development carried out with consent — with exceptions

Conveyancing Act 1919 (NSW) s 89

Supreme Court power to modify or extinguish restrictions — obsolete / no practical benefit / abandonment / no substantial injury

Conveyancing Act 1919 (NSW) s 88B

Instrument creating easements, restrictions and positive covenants on plan registration

Environmental Planning and Assessment Act 1979 (NSW) s 3.16

Environmental planning instruments may suspend covenants (Governor's approval)

Office of the Registrar General discussion paper

Proposed obsolete-covenant and sunset-date reforms — consultation stage, not law

Frequently asked questions

Does a restrictive covenant stop a DA in NSW?

Often not. Clause 1.9A of most councils' LEPs suspends private covenants for development carried out in accordance with a consent, so a purely private covenant is generally not a bar to approval. The big exceptions: covenants imposed by or required by the council, instruments protecting public interests (conservation and biodiversity agreements, planning agreements, Crown land instruments), and public authorities' registered rights. Check your council's own clause 1.9A and your 88B before relying on this.

Can I build a dual occupancy if my title says one dwelling only?

Frequently yes, in an R2 zone where dual occupancies are permissible — clause 1.9A typically suspends a private single-dwelling covenant for development approved under the planning system. But if the covenant was imposed by council, 1.9A does not apply and the covenant bites. This is exactly why you read the 88B first: who imposed the restriction, and who benefits, decides the answer.

How do I permanently remove a covenant from my title in NSW?

Either every benefited owner consents to a registered release or variation (rare across an estate), or the Supreme Court modifies or extinguishes it under s89 of the Conveyancing Act 1919 — on grounds that it's obsolete, impedes reasonable use without practical benefit to anyone, has been abandoned or waived, or that removal won't substantially injure the benefited owners. Suspension under clause 1.9A is not removal — the covenant stays on title.

What are the proposed NSW covenant reforms?

The Office of the Registrar General has consulted on deeming certain covenants obsolete after 12 years, simplifying the process for clearing obsolete covenants from title, putting sunset dates on new covenants, and expanding the Supreme Court's powers. It is a discussion paper only — not law, and no implementation date has been set.

Does clause 1.9A apply to complying development?

Clause 1.9A covers development carried out in accordance with the plan or a consent granted under the Act, which in most cases extends to complying development certificates. Certifiers do not assess covenants when issuing a CDC. But the same exceptions apply — a council-imposed covenant is not suspended — so confirm what your 88B contains before lodging.

How do I find out what covenants are on my property?

Order the title documents. Our Full Planning Pack ($105) bundles the Certificate of Title, Plan of Subdivision and the 88B Instrument — the document that lists every easement, restriction and positive covenant with its burdened/benefited table — delivered in 24–48 hours, with an optional AI plain-English restrictions review (+$30).

Is NSW the same as Victoria on covenants?

No — they're near opposites today. Victorian law currently prohibits a permit that would breach a registered covenant (its legislated reform commences by late 2027). NSW's clause 1.9A does the reverse: it suspends most private covenants for approved development, leaving permanent removal to consent or the Supreme Court under s89.

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