The following bodies may create a positive covenant:
- a prescribed authority on its own Order:
Such an Order must identify the land affected by the positive covenant, specify the terms of the positive covenant, and specify the prescribed authority imposing the positive covenant.
- the parties to an easement noted on the Register as regards the maintenance and/or repair of the easement site pursuant to s88BA Conveyancing Act 1919.
- the Association of a Community Title scheme pursuant to a unanimous resolution. The positive covenant must burden lot 1 in a Community Title scheme, or all of the land in the scheme.
- the Owners Corporation of a Strata scheme pursuant to a unanimous resolution. The positive covenant must burden the common property of a Strata scheme, or all of the land in the scheme, see s34(1) Strata Schemes Development Act 2015.
A positive covenant, other than pursuant to s88BAConveyancing Act 1919, requires the registered proprietor to:
- carry out development within the meaning of the Environmental Planning and Assessment Act 1979 on the land and/or
- provide services to the land or land in the vicinity and/or
- maintain, repair or insure any structure or work on the land.
The body creating the positive covenant can impose any term or condition with respect to the performance of, or failure to perform, any such obligation.
A plan fee is not payable for an annexed plan relating solely to the positive covenant.
A positive covenant noted on the Register has no effect on the registration of dealings. It does not have to be noted in the Encumbrances nor is the consent of the benefiting party required.
For a positive covenant:
See Baalman And Wells, Land Titles Office Practice, Lawbook Co. 2001 [196.140].
Where a registered proprietor has failed to comply with an obligation imposed by a positive covenant, the prescribed authority may itself carry out the obligation and recover the cost by obtaining a judgment from the Court. If the judgment is not satisfied the authority can:
- sell the debtor's property under a writ
- obtain a garnishee order against the debtor's income or
- register a Covenant charge pursuant to 88F Conveyancing Act 1919 against the debtor's property.
A registered covenant charge:
- gives the prescribed authority the same powers as a mortgagee. If the authority uses its power of sale, a Transfer Under Power of Sale form 01TP suitably modified may be used. The covenant charge and any other subsequent charge, covenant charge or mortgage will be cancelled.
- gives the covenant chargee the right to take possession, grant a lease or appoint a receiver in respect of the land affected.
- cannot be postponed or varied.
- can be discharged wholly or partially by lodging a Discharge Of Mortgage form 05DM suitably modified.
- prevents the registration of a writ for the same judgment, see s88F(7) Conveyancing Act 1919.
- cannot be recorded on the common property folio of a Strata scheme. The amount owing is apportioned among the lots in the scheme, and covenant charges are recorded on the relevant folios of the Register, see s32(4) and 28(3) Strata Schemes Development Act 2015.