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5 Things You Should Know about Property Titles in Australia

By September 13, 2017 No Comments

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If you are thinking about buying real property in Australia, then you should know something about property titles, or land titles. Registering land titles in all states and territories of Australia occurs under the Torren’s principle. Read on for 5 more things you should know about property titles in Australia.

What is the Torren’s principle? Buyers establish land ownership in Australia through the registered land title, rather than by a deed. This is known as the Torren’s principle, named after Sir Robert Richard Torren, third Premier of Australia, who came up with the scheme in the late 1880s.

Each state and territory maintain a registry of all land tracts and the owners of each land tract within its borders. In other words, the online register is the official record of ownership. It maintains records of mortgages, easements, covenants, and any conditions on ownership. The register provides a right of ownership that a past event or error or omission cannot defeat, void, or cancel. This is known as an indefeasible title similar to a fee simple ownership.

Searching the databases. States and territories maintain databases on titles, surveys or strata, and the related documents. Most of the databases permit people researching land titles to search through the databases to find the historical background on property of interest to them.

Types of property titles. Australia has several types of property titles, only some commonly known to most people. Here are the different property titles:

  • The Freehold Title, or Torrens Title, used in all states and territories, guaranteed by the government, and covers most residential land and some commercial land. If the land has no mortgage, then the title owner is the person listed on the title-deed as owner.
  • Strata Title. The name of this title often varies between states and territories, but everywhere it means there are conditions on the title. One can find strata titles in both residential and commercial property. Buildings often group under one roof but one can also find freestanding buildings with Strata Title. Generally, Strata Title ownership refers to units that all exist on one parcel of land under a title-deed and the various owners share roads, gardens, community facilities, walls, roofs, common stairways, common hallways, etc. Each owner owns what’s inside the walls but not the outside of the unit. Strata units are lower in price because of the shared ownership but they also provide less privacy and often contain restrictions on the types of changes an individual owner may make to the outside of the unit. Similar to homeowner associations in the US, the governing body of the Strata community is a corporate board, who collects fees from homeowners to maintain/repair the common grounds. The governing board usually also maintains a fund for extraordinary and unexpected repairs, known as a “sinking fund”. When buying a Strata property, make sure to understand the restrictions on the property’s ownership.
  • Company Title. This type of title is not common today but began a century ago in certain areas. Historically, a company owns the entire parcel of land. Individuals become owners of a particular apartment by buying and holding a certain number of shares in the property. Re-selling this type of property involves the selling of those shares which may make the process unpopular with buyers and sometimes the other owners hold the right of approval for the sale.
  • Leasehold. Cattle farms and large wheat fields exist by virtue of perpetual government leases. The rules regarding leaseholds vary from state to state and territory to territory but generally require a certain amount of money down and then annual rent. If you consider buying a leasehold, study the rules carefully. Sometimes a state will subdivide a parcel if the area attracts residence activity. You will generally see this type of title in rural areas. A title search is imperative before buying. All land in the Australian Capital Territory (ACT) is held through leasehold title but its rules differ from other areas, again requiring detailed study before buying.
  • property-title-land-title-australia-retirement-villageRetirement Villages. These residences may include leaseholds, strata or group titles, community ownership or other titles. They often have restrictions on who may live there, the type of financing arrangements, and whether owners may sell or management sells and resells every unit. The rules depend on each village and warrant a careful review by a real estate lawyer before buying.
  • Moiety Title. Sometimes referred to as a cross-lease, this form of ownership is rare today. Ownership of a moiety unit means the owner registers his ownership of a share of the land where the unit group sits. In effect, the unit owner leases the right to live in the unit, and to use the common areas, from the other unit holders. The term itself comes from the Olde French moiete, meaning “half” or the Latin medietas, meaning “middle”, both used to refer in this context to shared ownership. It is possible to convert moiety titles to freehold.

Changing Title Details. Changing information on a title, also called title dealings, requires a land conveyancer or lawyer, or both. Changes to the title often include corrections to name/address, adding a recent buyer of the property, adding a second mortgage or changing the mortgagee on the property, noting that the owner made the last payment under the mortgage and the death of the owner.

If you want to change the boundaries on the Title, you will need to retain a licensed surveyor and a land conveyancer, or a lawyer. The process is complex so do not skimp on the professional help.

Lost or Stole Titles. When you buy a property, you receive a Certificate of Title — a paper that indicates your registration in the online land register. (If you have a mortgage, the lender keeps the Certificate of Title until you’ve paid off the loan.) You can apply to replace a lost or destroyed Certificate of Title. You will need a lawyer to complete the application, along with evidence and supporting documents.

It’s important that you have a licensed and insured conveyancing professional who is experienced in your state assisting you in your property transfer. At Titlexchange, we make sure that all of our conveyancing members meet all of these criteria. Speak to a member of our team about finding the best local conveyancer for your next purchase or sale.