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There’s no tiptoeing around the fact that housing is tight right now. Older, more centralized neighbourhoods are already packed and new neighbourhoods are being built further and further out to try and accommodate the increasing demand for Australian housing. It’s no small wonder that so many people are choosing to build more than one home on their property, though this often works in many different ways. Some people who’ve had a family home for decades are building a second home in their ample yard space, others are buying empty lots and building duplexes or two separate homes on the same lot. Then there are the retirees who are building themselves smaller ‘granny flats’ which are essentially backyard cottages on their own property in order to rent out their primary homes or give them to their children. Some people are even demolishing an older house to build two in its place!
Altogether it’s turning into a surprising number of lots with two completely separate homes on them, further complicating the already complex title ownership system. Can you sell only one of the homes? Can you sell both homes separately? As long as you know what you’re doing the answer to both questions should be a resounding yes, but it will take the assistance of a skilled conveyancer to help you decide on the right title management solution for your plans and implement them effectively.
One Simple Strata or Two Torrens Titles
Two homes built on the same lot will, in general, start with a normal house and land Torrens title. The land was probably either empty or had a single family home on it when originally purchased and has since been modified to contain two single-family homes, also known as a ‘dual-occupancy property’. Your two options in this situation are:
- Completely sub-divide the property into two separate Torrens titles. This route will leave you with two legally separate properties that will no longer have anything to do with each other.
- Split the homes but keep the property unified with a simple dual-occupancy strata title. The strata title allows for shared assets like the roof and foundation of a duplex or a shared yard, pool, outbuildings, or driveway depending on how the property is put together.
Which one you choose should be determined by a combination of land arrangement and personal preference.
Sub-Dividing Into Two Torrens Titles
The simplest way to deal with your two-home situation is to sub-divide it into two Torrens titles. However, unlike a strata title, there are a few qualifying factors that must be met.
First, it can’t be a duplex. Sharing a wall, foundation, and roof automatically make the two homes one property even if they are otherwise essentially separate.
Second, the two homes need to have their road access and legal driveways.
Third, you must be able to create two separate yards with no shared assets like a pool, garden, or workshop. Putting in a separating fence is a good way to indicate where the property line needs to be.
When you sub-divide, you’ll need the help of a conveyancer to not only change the details on the first title but to create an entirely new title that will represent your now separate second property.
Changing To a Dual-Occupancy Strata Title
If your properties can’t be effectively separated because they share a roof, driveway, or other essential physical elements then you’ll need to go with a dual-occupancy strata title. This is the best answer to selling two halves of a duplex separately and works equally well for two-home properties for which the yard and other assets cannot be easily split. The good news is that with only two residences and two owners, all that body corporate hassle is minimized to almost nothing. You will still need to work together on joint concerns like maintaining a shared driveway or roof but there will be no required voting, accounts record keeping, or even a sinking fund if the homes are physically separate. In other words, a dual-occupancy strata title is a simple and fairly easy to implement solution to selling two separate homes that share a few inseparable assets. The best part is that you can register your two-home property for a simple strata title at any time as long as you’re ready to go through the title changing process. Once you are the official owner of two legal residences, you can sell one or both at your leisure.
Which Title Solution is Right For Your Property?
A simple strata title is available for any property with two residences on the same lot. You can even get a strata title for a granny flat attached to the main house as long as it has its own entrance, kitchen, bathroom. Sub-divided strata titles, on the other hand, are best used only when you have two properties that would serve equally well as single-family residences. This means fair road access, a reasonable amount of yard space for the area (less in urban neighbourhoods, more in the suburbs), and privacy from the other home. You will also need council approval to subdivide one of their local lots while strata titles tend to be fine if you already had the approval to build a second dwelling.
In conclusion, Torrens title subdivision is a great way to separate two homes if they meet the separation requirements. Otherwise, a strata title that allows units on the same property to be purchased separately is the easier way to go.
With either decision, it will be important to have a skilled conveyancer involved in the process to ensure that the complex reallocation goes smoothly and you can sell either property free and clear. Contact us now to get started!