Get the Finder app 🥳

Connect your accounts & save

Everything you need to know about Section 173 Agreements

If you own property in Victoria, a Section 173 Agreement places restrictions on what you can do with your land.

Updated

Fact checked

Section 173 agreements feature image

One of the great joys of owning a property is that you have control over what happens to it. Whether you want to renovate your kitchen, put a swimming pool in the backyard or simply hammer a nail into the wall so you can hang a picture, you have the freedom to do so.

But that doesn’t mean you can do anything you want with your property. There are restrictions on how you can develop it, the activities you can conduct on the land and a range of other issues, and it’s important to be aware of these before you purchase a property.

In Victoria, restrictions applying to a property are detailed under what is known as a Section 173 Agreement. Let’s take a closer look at how these agreements work and how they could affect you.

What is a Section 173 Agreement?

A Section 173 Agreement is an agreement between a Victorian local council and a landowner. This type of contract places a range of restrictions on how you can use the land you own and it is registered on the title to the land.

Section 173 Agreements get their name from the portion of the Planning and Environment Act 1987 on which they are based. Their basic purpose is to lay down guidelines concerning the development of a neighbourhood and to help satisfy planning objectives, but they can also be used to ensure that landowners satisfy any conditions outlined in development or subdivision permits they obtain from their local council.

Who enters into a Section 173 Agreement?

In the vast majority of cases, Section 173 Agreements are made between a local council and a landowner, or between a council and a person who it is anticipated will become the owner of the land.

However, there may also be additional parties who are bound by the terms of an agreement. For example, a planning authority or a developer interested in using the land may also be included in the contract.

It’s also important to point out that a Section 173 Agreement can be registered over the title to the land in question. This means that not only are current landowners and occupiers bound by the agreement, but future landowners and occupiers as well. For example, an agreement may prohibit the development of a particular parcel of land for residential purposes now and for a specific time period into the future.

When is a Section 173 Agreement required?

Section 173 Agreements are used to impose restrictions on how land can be used in a wide variety of circumstances, including:

  • To protect native vegetation
  • To allow subdivision of the land before the completion of the development of the land
  • To prevent further subdivision
  • To provide for the ongoing monitoring and reporting of activity undertaken on the land
  • To provide for the maintenance of a particular facility on the land
  • To provide for the creation and maintenance of infrastructure
  • To provide for staged developments
  • To coordinate development with adjoining landowners
  • To set out an agreement for monetary contributions for the construction of a road

The conditions in an agreement bind all current and future landowners and occupiers until a specified event occurs or a specified time period finishes.

section 173 agreements

How can I get a Section 173 Agreement drawn up?

A Section 173 Agreement is an important legal document, so it’s vital to obtain independent legal advice before having a contract drawn up.

An agreement can be prepared by solicitors acting on behalf of you or your local council. The contract must be prepared to the satisfaction of all parties entering the agreement, so if your solicitor draws up the agreement it will then need to be approved by the council’s solicitors. You will need to cover the legal costs incurred in the preparation of the document.

Any Section 173 Agreement must be approved and signed by the council at a council meeting. Once this has occurred the agreement can then be registered on the title to the land. Applications to register the agreement can be made with Land Victoria and this will usually be done by your solicitor. A Dealing Number will be provided as confirmation that the Section 173 Agreement has been registered.

What if I want to change an agreement?

If you want to make any changes to a Section 173 Agreement, all parties will need to approve the changes as it is a binding contract. So if you’re not satisfied with the existing terms of an agreement, you’ll need to make an application to the council. The exact process for dealing with proposed changes to an agreement varies from one council to the next, so contact your local council for more information.

If you can’t agree to new terms with your council, the next course of action is to apply to VCAT (Victorian Civil and Administrative Tribunal) for an amendment. Any disputes relating to the terms and conditions of an agreement may also be referred to VCAT for assessment.

Finally, remember that if you fail to comply with the terms of an agreement, you may be subject to a hefty fine and potentially prosecution in the Magistrates’ Court. The council may also apply for an enforcement order to prevent you breaking the terms of the agreement.

Compare your mortgage options now

Data indicated here is updated regularly
$
Loan purpose
Offset account
Loan type
Repayment type
Your filter criteria do not match any product
Name Product Interest Rate (p.a.) Comp Rate^ (p.a.) Application Fee Ongoing Fees Max LVR Monthly Payment Short Description
St.George Basic Home Loan - LVR 60% to 80% (Owner Occupier, P&I)
2.64%
2.66%
$500 (waived for loans above $150,000)
$0 p.a.
80%
Refinancers borrowing $250,000 or more can get a $2,000 cashback per property (Other terms, conditions and exclusions apply). A low variable interest rate for home buyers and refinancers. Application fee waived for loans above $150,000.
Suncorp Back to Basics Home Loan - Better Together Special Offer $150k+ LVR<=90% Incl. LMI (Owner Occupier, P&I)
2.78%
2.79%
$0
$0 p.a.
90%
Get one free online redraw per month and pay no ongoing fees. Application fees are waived for loans above $150,000. Refinance to an eligible Suncorp loan and get a cashback of $2,000 or $3,000, depending on your loan amount. Other conditions apply.
UBank UHomeLoan Variable Rate - Discount Offer for Owner Occupiers, Variable P&I Rate(*now 2.59%, drops to 2.49% on 17 Jul)
2.49%
2.49%
$0
$0 p.a.
80%
Enjoy flexible repayments, a redraw facility and the ability to split your loan. Plus, pay no application or ongoing fees. UBank is cutting variable rates. This rate will drop to 2.49% p.a on 17 July 2020 for new and existing customers.
loans.com.au Smart Home Loan - (Owner Occupier, P&I)
2.57%
2.59%
$0
$0 p.a.
80%
Get a low variable interest rate and pay 0 application or ongoing fees with this convenient online lender.
ME Flexible Home Loan Fixed with Members Package - 2 Year Fixed Rate LVR <= 80% (Owner Occupier, P&I)
2.49%
3.41%
$0
$395 p.a.
80%
Lock in a competitive rate for owner occupiers for two years. Comes with a 100% offset account.
Virgin Money Reward Me Fixed Rate Home Loan - 2 Year $300k+ Special offer (Owner Occupier, P&I)
2.29%
2.91%
$300
$10 monthly ($120 p.a.)
80%
Buy your home and lock in a low rate for the first two years. Get a $2,500 cashback when you switch to Virgin Money with a loan amount of $300,000 or more with an LVR up to 80%. You must apply by 28 August and settle by 30 October 2020.
loans.com.au Essentials - Variable (Owner Occupier, P&I)
2.79%
2.81%
$0
$0 p.a.
90%
A simple mortgage with a competitive interest rate and no application or monthly fees. Borrow up to $1000000 from a convenient online lender.
Bankwest Complete Home Loan Package Variable - $200k to <$750k LVR <=80% (Owner Occupier, P&I)
2.73%
3.18%
$0
$395 p.a.
80%
A low variable rate loan with a 100% offset account and package discounts.
State Custodians Low Rate Home Loan with Offset - LVR up to 60% (Owner Occupier, P&I)
2.49%
2.51%
$0
$0 p.a.
60%
A competitive rate with no application or ongoing fee. This loan is not available for construction.
Athena Variable Home Loan - Investor, P&I
2.99%
2.95%
$0
$0 p.a.
80%
Athena offers a competitive variable rate for investors. No ongoing fees and no application fee. Principal and interest repayments.
loading

Compare up to 4 providers

Aussie Home Loans Logo

Enter your details and get a free consultation with an expert broker from Aussie.

By submitting this form, you agree to the Finder Privacy and Cookies Policy and Terms of Use

Applications are subject to approval. Conditions, fees and charges apply. Please note that you need to be an Australian citizen or permanent resident to apply.

Credit services for Aussie Select, Aussie Activate and Aussie Elevate products are provided by AHL Investments Pty Ltd ACN 105 265 861 (“Aussie”) and its appointed credit representatives, Australian Credit Licence 246786. Credit for Aussie Select products is provided by Residential Mortgage Group Pty Ltd ACN 152 378 133, Australian Credit Licence 414133 (“RMG”). RMG is a wholly-owned subsidiary of the Commonwealth Bank of Australia ABN 48 123 123 124 AFSL and Australian Credit Licence 234945. Credit for Aussie Activate products is provided by Pepper Finance Corporation Limited ACN 094 317 647 (“Pepper”). Pepper Group Limited ACN 094 317 665, Australian Credit Licence 286655 acts on behalf of Pepper. Credit services for Aussie Elevate products are provided by AHL Investments Pty Ltd ACN 105 265 861 Australian Credit Licence 246786 (“Aussie”) and its appointed credit representatives. Aussie is a trade mark of AHL Investments Pty Ltd ABN 27 105 265 861. Credit and any applicable offset accounts for Aussie Elevate are issued by Bendigo and Adelaide Bank Limited ABN 11 068 049 178 AFSL / Australian Credit Licence 237879.

Aussie is a trade mark of AHL Investments Pty Ltd. Aussie is a subsidiary of the Commonwealth Bank of Australia ABN 48 123 123 124. ©2020 AHL Investments Pty Ltd ABN 27 105 265 861 Australian Credit Licence 246786.

By submitting this form, you agree to the Aussie privacy policy.

After entering your details a mortgage broker from Aussie will call you. They will discuss your situation and help you find a suitable loan.

  • A comparison of home loans from multiple lenders.
  • Expert guidance through the entire application process.
  • Free suburb and property reports.

Aussie Home Loans Lender Logos

The Adviser’s number 1 placed mortgage broker 8 years running (2013-2020)

Image: Shutterstock

Related Posts

Ask an Expert

You are about to post a question on finder.com.au:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com.au is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder only provides general advice and factual information, so consider your own circumstances, or seek advice before you decide to act on our content. By submitting a question, you're accepting our Terms of Use, Disclaimer & Privacy Policy and Privacy & Cookies Policy.

2 Responses

  1. Default Gravatar
    DavidApril 16, 2018

    Hello,
    Can you have multiple Section 173 Agreements on a Title?
    Thank you in advance.

    • Default Gravatar
      NikkiApril 16, 2018

      Hi David,

      Thanks for your message and for visiting finder – the leading comparison website & general information service built to give you advice in your buying decision needs. How are you doing today?

      You can only have 1 Section 173 in an agreement, however, should you need than 1 restriction, it can be listed down in the title.

      Hope this helps! Feel free to message us anytime should you have further questions.

      Cheers,
      Nikki

Ask a question
Go to site