Property titles in Australia

Types of title

There are a number of different types of property titles in Australia. Many are completely unknown to the majority of people and are rarely encountered.

Property titles in Australia

The following are the most likely titles you could encounter in Australia. Be quite sure of the title which applies to any property in which you are interested and be sure which one you require.

The following information should apply to all states but there are going to be some variations and the best way to check will be by searching the appropriate state and “Titles to real estate ownership’.

Freehold  

This is generally referred to as Torrens Title, used in all states and named after Sir Robert Torrens - the South Australian politician who introduced it in 1858. These titles are registered by the state government and are guaranteed. The greatest number of properties in Australia fall under this system because it covers almost all residential titles and also most commercial titles. Providing there is no mortgage on the property then the property completely belongs to the ‘title owner’ who is named as such on the ‘Title Deed’.

The property may have encumbrances for sewerage or other services and all values below the surface - such as coal or oil - are retained by the Crown. At one time a ‘Title Deed’ was a large sheet of parchment and the reverse of it contained a history book of previous owners going way back. Of recent times the practice has changed and now the ownership, in some states, is often only noted within a data bank unless the new owner requests a written copy of ownership. This is likely to be provided on an A4 sheet of copy paper, though, and show only your own particulars as owner.

Group title or strata title

The exact name of this title can vary slightly between states but should give an indication that there are some conditions on ownership.

It can apply to both residential and commercial properties, either standing singly or grouped under the one roof. What they have in common is the fact that they are all probably sited on the one title deed parcel of land, and that they share certain facilities such as roads, gardens, etc.. They can also share common walls, roofs, stairwells, entrance halls and community facilities. These properties can offer a lower purchase price because of this sharing but the privacy and individuality of the owner can be jeopardised.

The owner of a property owns the inside of their unit but usually not the outside which is termed ‘common property’. This means that an external awning over a window needs permission before it can be erected.

A ’Body Corporate’ is elected from amongst the owners to control the total property and govern the compulsory collection of fees for the cleaning and maintenance of the ‘common property’. They also have a ‘sinking fund’ which levies fees to cover major expenditure such as repairs to the roof, repairs to the lift, etc.. These fees can be quite a significant total and a potential buyer needs to fully understand them. In the past, some ‘body corporates’ were set up and conducted by a connection with the developer. They were conducted, perhaps unfairly, having a hold even over the provision of services provided to the total property and even restricting future leasing agreement. Read the contract and any agreement very, very carefully.

Company title  

This style of ownership originated almost a century ago but may still be present in some areas. A company will be the owner of the complete complex and by right of purchasing and holding the appropriate number of shares one can attain the rights to a particular apartment. A somewhat similar system exists in places where a large parcel of rural land is purchased by people who wish to erect a residence and enjoy the rural atmosphere without having to care for a large block of land. Four, five or more people may club together to afford the property and erect homes but share the land as a whole. Restrictions are placed by the local council on the way that it is developed.

There is little known about this kind of title amongst the general public and the subsequent selling of a property will require the sale of the shares which may be difficult. It may also require the other residents to approve the new buyer.

Leasehold

In the main, this method of holding property is utilised over government properties in rural areas. The large cattle or wheat properties for example, are under long-term or perpetual lease. There can be an initial cost involved plus annual rental. Terms and conditions vary.

At times, the state governments may decide to subdivide and release these properties if the area is becoming desirable for residential development. It has happened that leasehold has been mistakenly purchased in the presumption that it was freehold but this occurrence is only likely to be encountered in rural areas. A title search of the property before purchase is required.

Some old church property is also tenanted in this manner.

In the Australian Capital Territory (ACT) all land is held under leasehold title but with some slight difference. If this is your desired area of residence you should study the title system further.

Retirement villages  

There are a number of very good retirement villages offering different types of tenure. They can be either leasehold, strata, community ownership or other. Certain conditions are applicable and it is important that legal advice be sought and fully understood. There may be restrictions on your occupancy, how it must be financed, whether it can be resold individually or only through management etc.. Annual fees can apply. Look into the matter very carefully.

Of all these, the most common titles are freehold and strata or group title.

Article written by: Fred Sparrow - Legal Kit Specialists Conveyancing Kits 

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