The responsible authority can negotiate an agreement with an owner of land to set out conditions or restrictions on the use or development of the land, or to achieve other planning objectives in relation to the land. (For VicSmart applications, the responsible authority will be your local council.)
Like other agreements, a section 173 agreement is a legal contract. However, the benefit of a section 173 agreement is that it can be recorded on the title to the land so that the owner's obligations under the agreement bind future owners and occupiers of the land. A section 173 agreement can also be enforced in the same way as a permit condition or planning scheme.
For more information on Section 173 Agreements take a look at Chapter 8 of the government guide "Using Victoria's Planning System".
Source: Using Victoria's Planning System by the State of Victoria
