A covenant is another form of encumbrance that should appear on a Certificate of Title. It is a stipulation about something that should or should not be done. It is a contractual agreement between one landowner and subsequent landowners to do or not do something. Purchasers buying property with a covenant must adhere to the terms of the covenant.

A typical covenant may require all the fences in a development to be of a certain style and height or houses in that area be constructed of a minimum of 80 per cent brick.

Covenants are enforced like any other type of contract. A covenant is regarded as a proprietary interest in land, enforceable against third parties. Parties to a covenant will be deemed to have a caveat interest in land.