Under the Fencing Act 1978 the occupier of a property can force the occupier of any neighbouring property to pay half the costs of a fence along the boundary between the two properties, if it is not already adequately fenced.

A fencing covenant provides that the person, in whose favour the fencing covenant is registered, is exempt from this requirement. A fencing covenant that is not in favour of a local authority expires 12 years after it was first registered.

Fencing covenants are common in subdivisions where the subdivider does not want to be liable for the costs of fencing or where a local authority does not want to be liable for the costs of fencing any land administered by that local authority.