When outdated land covenants meet new planning realities

Courts are becoming increasingly willing to extinguish or modify land covenants where there has been a change in the character of a neighbourhood or where the continuation of the covenant would unreasonably impede reasonable use of land in a way that was not foreseen at the time the covenant was created - the High Court’s recent decision in Glenoir LP v Andrews [2026] NZHC 2654 is yet another example of this.

This trend is welcome news for the many developers and landowners who find themselves restricted by covenants created decades ago under a very different planning regime. Increasing pressure on land use and availability means that the trend is likely to continue.

Another example of this is set out in our earlier article on this topic.

Key takeaway

Although land covenants have historically been difficult to modify or remove, in our experience that is changing. Developers and landowners are finding increased success modifying or extinguishing covenants where the Courts may previously have been reluctant to do so.

Background

The case is unremarkable on its facts and represents a common situation where a covenant registered over a property some time ago has become outdated. The covenant imposed restrictions on matters such as the appearance and visibility of buildings and specified requirements for water storage, wastewater systems and water for firefighting.

When the covenant was created, the area was zoned for low-density rural residential living, with subdivision limits. Since then, the relevant operative plan had changed and the new zoning allowed smaller lot sizes with connections to reticulated council services. As a result, there has been significant residential development in the area.

The High Court considered that those changes were significant enough to be considered a change in the character of neighbourhood, justifying the covenant’s removal. The Court also considered the covenant impeded the reasonable use of the land and that there would be no substantial injury to the owners who benefitted from the covenant if it was removed.

The emerging trend

Recent decisions, including Glenoir, show the Courts are now prepared to look closely at whether older covenants still serve a useful purpose in light of changed planning settings and the way an area has developed over time. That approach is significant for developers and landowners whose land is affected by covenants that reflect an earlier planning environment, particularly where those restrictions now prevent reasonable development or use of the land.

If you own, or are considering buying, land affected by a restrictive covenant, contact one of our experts to discuss your options. We have experience seeking the removal and modification of covenants, both through negotiation with affected landowners and through the Courts.

Special thanks to Nick France for his assistance in preparing this article.