Easements and land covenants can protect access, preserve character, and safeguard a community’s vision, but over time, they can also become outdated, impractical, or obstructive. For property developers, investors, and landowners, old restrictions can be more than lines on a title - they can be roadblocks to progress.

An easement is a legal right for someone else to use part of your land - for example, a neighbour’s right to use your driveway, or a utility company’s right to run pipes through your property.
A covenant is a rule or restriction on how the land can be used - for example, “no building higher than one storey,” “no commercial activities,” or “no second dwelling.”

These rules often made sense when created, sometimes decades ago, but can clash with modern needs. A covenant banning more than one house might block you from building a minor dwelling for family or rental income. An easement allowing shared access might restrict where you can put a fence or driveway.

With urban growth accelerating, the ability to modify or remove outdated rights has never been more relevant. Recent court decisions under the Property Law Act 2007 are reshaping how and when changes can be made, making it essential to understand the rules before you buy, build, or redevelop.

Extinguishment and modification of easements

"The times they are a-changin"

There can be no doubt that occupation of land and its use has changed dramatically in New Zealand in the last decade. Population growth, urban development and a change in the way we use and live on our land are just some of the reasons driving change. Unfortunately, older easements and covenants have not been able to keep up with the change and are thus becoming incompatible with 'modern' land use. The consequence is a steady increase of applications before the courts for modification or extinguishment of easements or covenants pursuant to section 316 and 317 of the Property Law Act 2007 (PLA).

How section 317 of the Property Law Act works

When old property rules get in the way - Section 317 of the Property Law Act 2007 (PLA) gives the court the power to change or cancel an easement or covenant in certain situations. In simple terms, it’s a legal tool to update outdated land restrictions so the land can be used more sensibly today.

When can the court step in?

The court can consider changing or removing an easement or covenant if:

1. Circumstances have changed since it was created, for example:
   
   • How either property is used (the one that benefits or the one that’s burdened, or both).
     
   • The character of the neighbourhood.
     
   • Any other relevant change the court thinks matters.
     
2. It’s blocking reasonable use of the land it applies to.
   
3. The parties have agreed to change or end it, or someone’s actions (or lack of action) show they’ve effectively abandoned the right.
   
4. Changing it won’t cause serious harm to anyone who benefits from it.
   
5. In the case of a covenant:
   
   • It’s illegal, against public policy, or
     
   • It’s simply fair and reasonable to change or remove it.

If the court makes the change, the person who benefits from it may have to pay compensation to the other side.
(The details of how compensation is calculated are a separate topic).

Who has to prove what?

The burdened landowner (the one who wants the easement or covenant changed or removed) must prove there’s a valid reason under the law.
The benefiting landowner doesn’t have to prove why it should remain.

Cases that shaped Section 317 in practice:

• Synlait Milk Ltd v NZ Industrial Park Ltd (2020) changed the approach. In the past, you had to give very strong reasons to get a change. Now, the court looks at the specific facts of each case and applies a two-step test:
  
  1. Does the case meet at least one of the legal grounds in Section 317?
  2. If yes, should the court use its discretion to make the change?
• In Hurlimann v Lilley (2023), the Court of Appeal added that if the original parties to the easement or covenant are still involved, their original contract rights usually carry more weight.

• In F & J Reynolds Trust v Parklands Properties Ltd (2021), the court said:
  
  • A simple change in circumstances isn’t enough. The change must affect the benefit or burden of the easement or covenant.
  • In that case, the neighbourhood had changed (new houses), but:
    
    • The right of way still gave the same benefit to the benefiting land.
    • The burden on the other land was basically the same.
  • Wanting to develop the land in a way that required removing the right of way wasn’t enough proof that the benefit or burden had changed.
  • Simply planning to subdivide also doesn’t count as a “change” under the law.
    

Other key points

• Reasonable use - Section 317(b) can apply if new technology changes how a property is used in ways the original easement couldn’t have predicted.
  
• Any other circumstances - Section 317(1)(a)(iii) is a “catch-all” rule.
  
  • Example: In Kingsbeer v Okey (2024), an easement was cancelled because one party repeatedly failed to repair road damage despite court orders.
    
• No substantial injury - Section 317(1)(d) means the change must not cause serious harm to the benefiting owner. Minor inconvenience isn’t enough to block it.
  

Looking ahead

With growing demand for housing and more development projects, disputes over old easements and covenants will probably become more common. While courts are now more open to making changes than before, they still take a careful, case-by-case approach.

If an easement or covenant is standing in the way of your plans, you don’t have to leave it unresolved. With the right legal advice, there may be pathways to modify, remove, or work around outdated restrictions. Contact us to help you understand your options and guide you through the process so you can move forward with confidence.