RESTRICTIVE COVENANTS – COMMERCIAL LEASE

Restrictive covenants need not be shown on the lease document but will show up on the title search. For example, a covenant restricting the use of the premises for certain purposes. In the ACT the crown or ground lease from the government has a lease purpose clause. It is necessary to determine that the use of the building comes under that clause.

EXAMPLE

Old church lands at Bondi Junction have a restrictive covenant on the sale of alcohol and tobacco. This meant that the local shopping centre could not operate a liquor store and therefore, had a significant effect on retail value.