Understanding a s173 agreement when purchasing property
Most people buying property associate the vendor statement, or section 32, as the paperwork that tells you things about the property that you can’t find on a physical inspection. Often hidden in the vendor statement is a section 173 agreement which can contain serious restrictions and rules about what you can and can’t do to your new home.
A section 173 agreement is agreement between the local council and the landowner that restricts the way you can use the land. Common restrictions in a section 173 agreement include the type of fencing, the removal of trees, the façade or style of landscaping and post box you can have.
Normally you will find a section 173 agreement is buying a house and land package, or a land from a developer or estate. What commonly happens is that the local council will allow the developer to develop the land, but only if they enter a section 173 agreement about the neighbourhood character and future development.
Most importantly, if you are buying the land you need to comply with the section 173 Agreement. Even if you have bought the land from a previous owner, not the developer, you are must still comply with the section 173 Agreement. The worst case scenario is the previous owner has improved the property but not complied with the section 173 agreement, and you have to comply with it which could result in taking down structures or rebuilding improvements.
A section 173 Agreement should be seen as a contract between the landowner and the council. If you want the section 173 Agreement changed, you need to get the agreement of council, or apply to VCAT to have council’s decision reviewed.
The long and short of it is that section 173 can contain serious restrictions on how you use your property. It crucial when buying to check for this and be properly advised of the restrictions that apply to your land because the consequences of disregarding a section 173 agreement can be disappointing or disastrous.
For assistance with purchasing or selling a property, contact our Conveyancing team on 03 5445 1000 or book online (purchase or sale)