How Can You Change Outdated Land Restrictions?

Easements and covenants help protect access, as well as preserve character and community values. However, they can become outdated, impractical, or obstructive.

Easements allow one landowner to use another’s land for a defined purpose, such as a right of way. Covenants restrict or regulate land use, such as limiting building height or number of dwellings. While these arrangements once served clear purposes, they often clash with modern needs. Many are now being challenged as land use needs and planning priorities evolve.

The Property Law Act 2007 (PLA) provides landowners with a pathway to vary or extinguish easements and covenants by applying to the courts. And where they were once hesitant to interfere with private property arrangements, courts are increasingly pragmatic, recognising that outdated restrictions can impede reasonable development.

Under the PLA, the court may modify or extinguish an easement or covenant if one or more statutory grounds apply. These include:

1. Obsolescence – where the instrument has become outdated due to changes in the neighbourhood or circumstances.

2. Impediment to reasonable use – where the restriction prevents reasonable land use in a way that is no longer justified.

3. Consent – where the parties have agreed to change or end it, or someone’s actions (or lack of action) shows they’ve effectively abandoned the right.

4. Public interest – where modification aligns with sound land management or planning goals.

5. Disproportionate hardship – where the burden outweighs the benefit.

6. Unobtainable consent – where those entitled to enforce cannot be found or identified.

Recent decisions are clarifying how the relevant sections of the PLA are used in practice.

Synlait Milk Ltd v New Zealand Industrial Park Ltd 2020

In the past, you had to give very strong reasons to get a change. In Synlait, the Supreme Court endorsed a simple two-step approach, in which the applicant is first required to prove that one of the statutory grounds in section 317 applies and then the court exercises its discretion to determine if the covenant should be modified or extinguished. The Court emphasised that outdated private restrictions should not frustrate modern, reasonable land use.

Hurlimann v Lilley 2023

The Court of Appeal confirmed the two-step approach but upheld restrictive land covenants that the buyer had agreed to. The case showed that a buyer that consents to the registration of land covenants and receives legal advice throughout the process is unlikely to find sympathy with the Court to then vary them.

F & J Reynolds Trust v Parklands Properties Ltd 2021

The Court held that a simple change in circumstances is not enough. The change must affect the benefit or burden of the easement or covenant. Wanting to develop land in a way that required removing a right of way wasn’t enough proof that the benefit or burden had changed.

These cases illustrate the courts’ growing recognition that strict adherence to long-standing restrictions can conflict with present-day realities, such as urban growth, housing demand, and planning reforms. At the same time, they show that the courts still require applicants to prove they have statutory grounds to change land restrictions and will decide for themselves whether to do so is just and reasonable.

In summary, the PLA empowers New Zealand courts to bring easements and covenants into line with today’s land use requirements. Recent cases indicate a tendency towards a more open judicial approach, giving landowners real prospects of success when outdated restrictions impede reasonable use. But this still requires evidence. If you are becoming frustrated by outdated or obstructive land restrictions and wish to make a change, please feel free to reach out to Freebairn and Hehir for expert advice.