Understanding titles
Land titles may seem technical but you need to understand them to know exactly what it is you own and what you can do with your property.
The seller's real estate agent will be able to tell you what type of title the property has and it should also be disclosed on the contract for sale. You should discuss the properties title with your solicitor.
TORRENS TITLE
Most freestanding houses in Australia are registered with Torrens title. Under this system, a Certificate of Title provides proof of ownership. When the property changes hands the transfer is recorded in a land title register, which is administered by the state or territory government.
If you buy a property with Torrens title, you own both the house and the land. There are fewer restrictions on what you can do with your property than other title types and you’re responsible for its maintenance.
STRATA TITLE
Units and townhouses are often registered with strata title. Strata title is based on Torrens title but the property is divided into lots which are sold separately.
When you buy a strata lot, you own everything inside the building’s external walls, and sometimes also balconies, outdoor areas and parking spaces. You share ownership of common property such as gardens, external walls, driveways and stairwells with the other owners.
All owners in a strata building are members of the owners’ corporation which is responsible for the common property.
You’ll pay levies into an administrative fund to cover day-to-day upkeep of the common property and a sinking fund to finance more significant capital works. You may also be asked to pay special levies for one-off expenses.
Strata owners must obey the building’s rule. These dictate things like whether you can keep pets, where you can park, whether you can install cable television, and how you can renovate.
Quick tip: Check the strata rules and who owns and maintains what before you buy. Also check the owners' corporation's finances and whether there are plans for any major building works. The owners' corporation records will show these details. You can inspect these records yourself for a fee or pay a company that specialises in strata searches to look into the records for you. Your solicitor or conveyancer will be able to help you find a service provider.
OTHER TITLES
Community title is adopts some of the characteristics of strata and Torrens title. You own your home and the land it sits on but you’ll also be a part owner in a scheme that owns and maintains common areas such as roads and recreational facilities like golf courses.
Older buildings may have company title.
With a company title property, you buy shares in a corporation that owns the building. The shares give you the right to exclusively occupy a unit in the property and share use of the common areas such as gardens and stairways.
Quick tip: The title type of the property you are considering may affect your ability to obtain loan approval. Once you have identified a property of interest, seek early advice in relation to the title type.
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Disclaimer: Information in this material is general and does not take into account your objectives, financial situation or needs and you should consider whether it is appropriate for you. You should also obtain independent professional advice relevant to your financial circumstances.
