Do You Really Understand the Property Title System?
Don’t Sign Anything without Expert Advice
If you are new to buying property, you are probably confused by some of the terminology you may have already experienced in the world of real estate. Encumbrances, liens, easements, group titles, conveyancing solicitors, mortgagee-in-possession – it all gets a bit much until you understand what the different terms mean.
The actual process of transferring property is fairly straightforward, as long as everything has been done correctly. If it hasn’t, the impact on your “quiet enjoyment” (another quaint legal term) of your newly acquired property can be frightening as well as very expensive. For example, a property may have encumbrances, which you would know about if the correct title searches were done.
Interpreting Title Search Results not a Job for the Uninformed
This is a part of conveyancing, which is the term used to described the process of transferring ownership of the title from the seller to the purchaser, and is best conducted by an experienced Gold Coast conveyancing solicitor. As trained legal experts, conveyancing solicitors undertake title searches on behalf of their clients and provide advice on issues that could cause a problem at settlement.
The Four Most Common Types of Title
In Australia the most common type of title is called Torrens Title. Most residential and commercial properties are registered under this system. The title is registered by the relevant state government, which guarantees the integrity of the document. The property is held as freehold, meaning that the owner of the property owns everything on its surface. Everything below the surface such as oil, coal or other minerals is retained by the Crown.
The next common title is a group or strata title where the properties are all situated on one parcel of land and each owner has a title to their part of the complex. Common walls, roofs, stairwells, entrances and community facilities are shared by all title holders. The owners elect a body corporate to control the common property and collect and administer fees to manage it. This body corporate also levies a sinking fund to cover major long-term expenditure that can be expensive. Potential buyers need to read contracts very carefully before purchasing.
When purchasing a property under company title, legal advice should be sought. In this title a complete parcel of land or building complex is held by the owner, and a purchaser holds shares in it. Difficulties can arise with the subsequent sale of the property as this requires the sale of the shares, and may also require approval of the other residents.
Leasehold title is held over government properties in rural areas under long-term or perpetual leases. Purchasers would most likely only encounter this type of title if buying a large farming lease or cattle property.
As with anything involving legal matters and large amounts of money, when in doubt seek the advice of experts. Conveyancing can be complex for people new to it, but in the hands of experienced professionals, it is not difficult.