Your home might be your castle. But that doesn’t necessarily mean you can do whatever you want with your property.

There may be planning restrictions that set out conditions or restrictions on the use or development of your land. In Victoria, these restrictions are commonly known as a section 173 agreement – getting their name from section 173 of the Planning and Environment Act 1987.

But what is a section 173 agreement? What restrictions can they place on your property? And, more importantly, how do you end or amend them if you’ve unwittingly bought a property with one? Let’s find out.

What’s a section 173 agreement?

A section 173 agreement is a legal contract typically made between a council and a landowner – though, sometimes, a third party such as a water authority may also be involved.

Their basic purpose is to help councils meet their planning objectives for a local area, by guiding the character and development of a neighbourhood. However, they are also commonly used by councils to ensure compliance with conditions in planning permits, especially when land is being subdivided.

Section 173 agreements must be entered into if and when required by the council. They are then registered on the title of the land. This means they don’t just bind the current landowner – but also all future landowners – to the agreement until it ends after a specific event or is removed from the title.

What restrictions can a section 173 agreement include?

As a section 173 agreement’s purpose is to control the use or development of land, common restrictions found in these agreements include:

  • Constraints on how the land can be developed in the future, such as preventing further subdivision
  • Requirements for landscaping and the retaining, maintenance and prohibition of certain trees or plants
  • Obligations to protect the heritage of the building
  • Restrictions preventing the owner from changing how the land is used

The penalties for failing to comply with a section 173 agreement can include a hefty fine and potential prosecution in the magistrate’s court. Councils may also apply for an enforcement order to prevent you from breaching the terms of the agreement.

How do you end or amend a section 173 agreement?

 A section 173 agreement is a binding contract between a council and landowner, so all parties must consent to amend or end it. This means you need to make an application to the council if you want to change the terms. If you can’t come to an agreement with the council, your next course of action is to apply to the Victorian Civil and Administrative Tribunal (VCAT) for a review of the council’s decision.

The process is understandably more complex when many parties are involved; for example, when land with a section 173 agreement is subdivided. Anyone who subsequently purchases part of the subdivided land automatically becomes part of the agreement – giving them a say on whether or not terms can be changed or the agreement ended.

In this scenario, if all parties don’t consent to the proposed changes, the council has to support the amendment at the VCAT. If they don’t, the agreement stays as is. The proposed changes may need to be advertised too.

Freya Southwell is a property development lawyer at Sutton Laurence King Lawyers.

Unravelling a section 173 agreement can be complicated. Get the expert advice you need before you enter into one or buy a property with one by calling Sutton Laurence King on 03 9070 9810 or filling out this online form.