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What Everyone Should Know about Title Transfers


We all have moments of “If only I’d known then what I know now.” Well, here’s five things about title transfers you may wish you’d known sooner. Let’s start with a few basics about property titles.

So, What Are The Various Types of Title Ownership?

  • Sole Ownership. Probably the ownership arrangement with which most people are familiar is the one where your name is the only name on the deed. That means, in practical terms, that you are the sole responsible party with respect to the property. This is also known as outright ownership.
  • Joint Tenants/Ownership. If your name and someone else’s name appears on the property’s deed as equal owners, then you own the property jointly with the other person. In practical terms, this form of ownership means that you and the other owner share equally in the rights and responsibilities of the property. This arrangement includes a survivor element; that is, when one party dies, the ownership of the deceased person transfers to the other joint owner. Do not confuse Joint Ownership with Tenants-in-Common where owners do not own equal shares.
  • Owners/Tenants-in-Common. Co-owner arrangements often involve friends or family members. They can also arise out of business arrangements. The parties involved need to exercise caution to pick reliable people and to memorialise the details of the arrangement in writing, preferably drafted by legal counsel. Family members often work out for this type of arrangement because of the relationship and because the financial situation is more often known. Tenants-in-Common own prescribed portions of the property and, when they die, they have the right to assign their portion to another beneficiary. In other words, no right of survivor-ship exists in this arrangement and the deceased’s portion does not automatically transfer to the other co-owners. It is critical that the parties negotiate a common-ownership agreement to protect their interests.
  • Trusts. An entity known as a trust may hold and manage a piece of property. The trustee — either a person or a company — holds and manages the property on behalf of the trust’s beneficiaries. We often see trust ownership when property transfers to younger family members; however, trusts come in various structures: unit trusts, family trusts, and hybrid trusts. The most common is the family trust in which the trustee manages the family’s assets and disseminates income and assets to the beneficiaries. This type of trust is usually set up for beneficial tax reasons for the family members. Trusts structured as units divide the property and assign ownership to the beneficiaries based on those units. In practical terms, that means the beneficiaries share in the income and expenses based on their unit ownership. A hybrid — as the name implies — combines family trust features with a unit trust.
  • Company Ownership. The biggest benefit from buying property as a company is that the transaction provides limited liability to the company’s shareholders. The company’s creditors cannot target your personal assets to satisfy the company’s debts. Another advantage is the company’s 30% tax rate which is lower than the highest individual tax rate. There are disadvantages, too, though, so undertake a study of which ownership structure is best in your situation.

Why Transfer a Title? 

There are many situations where a property owner may want to transfer a title from one person to another. Perhaps the most common reason that you will transfer the title to your property to another occurs when you sell your home — but there are other reasons, too. For instance, protecting an asset when involved in business dealings is one scenario where you may want to transfertitle-transfer-divorce-property-split title of property to a spouse or to other family members. We set out a few other examples below:

Divorce. The family home, vacation homes, or other real estate purchased as a result of the marriage relationship often appear as part of the property settlement in a divorce action. Sometimes the property settlement awards the family home or vacation home to one party over another. In that case, the title ownership will change to recognize the prevailing party.

Business reasons. Sometimes business partners will buy property in both their names. As the business matures, circumstances may change such that one of the partners will buy the other partner’s share. In such a case, the property title will transfer to the partner who becomes full owner.

Family reasons. If a property owner becomes ill and unable to care for his property, he or she may decide to pass on the property to another family member during his or her lifetime. Of course, if the owner dies, the probate court will honor the deceased’s wishes to pass along property to a particular family member or, if the will does not include a specific bequest or the owner dies intestate (without a will), then the executor may ask the court’s permission to sell the property to a third-party. In either case, the property title will transfer to the new owner(s).

Caveat on transferring title. No matter how you decide to structure your property ownership, always conduct a title search for the property before the title transfers to you. Nothing beats finally finding or receiving the property that you’ve dreamed about — unless it’s confirmation that the person or entity selling or transferring the property owns it free and clear of defects. In this instance, “defects” refers to the title ownership and not the land itself. “Defects” refers to another person’s right to ownership of the title or other encumbrances that might adversely affect the way you want to use the land.

Do you need professional help in transferring a property title? Titlexchange have a network of conveyancers across Australia that are experienced in the process of transferring titles. Make an enquiry with us today and one of our friendly team will be in touch for a discussion.