Can an Agreement Between a Council and Landowner Affect Your Plans to Buy a Piece of Land?

26 June 2018
 Categories: , Blog


Did you know that a local council can sometimes have a direct say in how a particular piece of private land can be improved? You may understand that set rules and regulations already dictate how the community is developed from a planning permission perspective, but this is something entirely different. If you're looking to buy a plot of land, how could this affect you?

Section 173

In the state of Victoria, for example, a section 173 agreement may be in place. This was introduced as part of a new planning and environmental act, and it allows the landowner to make a pact with the local council to restrict how the land can subsequently be used. This type of agreement may require that certain elements of the land are retained during development, such as a particularly mature tree. It may also prevent a subsequent owner from subdividing the property for potential gain. As you can imagine, this might significantly affect your future plans if you're considering the purchase of the lot.

How Do You Find out?

Whenever a section 173 agreement is in place, it is registered on the title of the land. So, you will need to look for this type of wording when you do your due diligence.


There may be additional stipulations, as well. For example, as a new owner you may be forced to coordinate development with landowners either side of you, or you may be required to stage any developments as you go forward. In some cases, you may need to spend money on additional infrastructure adjacent to the land, to 'compensate' for the building. Some people have been required to create additional open spaces or parklands, as an example.

Powers of the Council

The local council considers this type of solution to be very useful in helping them to set and achieve planning objectives in the general area. However, once the agreement is in place the council is not allowed to become directly involved in any transaction or be asked to approve it in any way. They still have limited powers in this extent.

Can You Amend it?

In certain circumstances, you may be able to amend an existing agreement if it doesn't fit in with your requirements. Usually, the agreement will run for a specific amount of time and expire on a set date, but if not then in most cases it can only be amended if all parties to the original agreement concur.

What Can You Do?

Certainly, the existence of this agreement may make your plans to purchase the lot more complicated. It's a good idea to get assistance from property lawyers with knowledge in this area to explore your options.