Do real estate agents' signs breach restrictive covenants prohibiting advertising hoardings?

Discussion in 'Legal Issues' started by MatthewDTownsend, 25th Nov, 2018.

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  1. MatthewDTownsend

    MatthewDTownsend New Member

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    This was considered in a decision handed down in the Supreme Court this week and I must admit, surprised me at first, but upon reflection, makes sense.

    The judge was considering a covenant that stated:

    No hoarding for advertisement purposes shall be erected on the said lot hereby transferred.

    His Honour essentially said the purpose of the covenant was not to prevent signage ancillary to the use of land for residential purposes:

    Construed literally, this restriction would prevent the erection on the land of a real estate ‘for sale’ or ‘for lease’ sign, for example, or a board supporting a candidate for election. But when construed in the context of a residential property in a residential neighbourhood, it seems to me that the purpose of the restriction is not to prevent reasonable advertising of properties for sale or for lease, or supporting a candidate for election. Its purpose is to prevent the erection on the Land of a board on which are displayed advertisements, particularly business advertisements, of a kind unconnected with the residential character of the land. Thus, advertising a business or advertisements for the sale of goods or land (other than the land in question) are covered by this restriction. In my opinion, the reasonable reader knows that in the Melbourne metropolitan area, ‘for sale’ signs on properties using a large board, sometimes with pictures of the dwelling, and details of its features is so common (and permitted by the planning laws) that to construe this restriction in accordance with its literal meaning would be to misread its purpose.

    It made me wonder whether this reasoning might even allow business identification signage for medical centres and other non-residential uses often permissible in Victoria's residential zones.

    Do covenants prohibiting advertising hoardings prevent real estate signage?
     
  2. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Councils tend to ignore limits on signs for conventional REA signs, election material and even small homebased businesses or tradesman ads. They can get a bit shirty if they are large, ulluminated, placed outside the property or to obstruct other property use (eg footpaths, roadways).

    My council removed one that was overhanging the roadway on the kerb - Every day for three days it went up and was down the next day and so on. A few days later agent replaced it inside the property. Its remained there. I suspect council told them to comply.

    Commercial business signs generally will get a council enquiry unless approved. The decision includes reference to that general view that a house sale board or election sign is pretty well excluded
     
  3. MatthewDTownsend

    MatthewDTownsend New Member

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    Interesting. I guess the problem with things being tolerated by Council is that they are ok, until they are not. By way of example, a former client of mine rubbed the building inspector up the wrong way, and the inspector went around the building site listing as many non-compliances as he could find. Amongst those, display of the sign used by the builder, without a permit. In the end I recall that charge was dropped as part of a plea deal, but it certainly added to his aggravation.
     
  4. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    There is a requirement for building works to have an approved form of sign for licensing and contact details and this includes owner builders. Such a sign without a building permit is more a case of no permit being applied for than a issue with the sign. I can understand the inspector cracking it.

    A mate of mine was pulled up for much the same thing after council did a drive past and was ordered to demo the $100K of building works complete to that point, THEN apply for a DA. Sign or no sign it was about the unapproved works
     

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