Property title guide
When buying or selling a property, you need to know about property titles as they are an important part of the due diligence involved in any property transaction.
Key takeaways
- A property title lists important legal information about a property, such as who owns it and if the property has a mortgage on it.
- When buying or selling a house, the property's title is updated to reflect the change in ownership at settlement.
- A conveyancer or solicitor will usually conduct a search of property title records during the settlement process and make sure there are no issues.
What is a property title?
Most property titles in Australia are either:
- Freehold or Torrens title: This is the most common type of title used for standalone properties in Australia.
- Group or Strata title: This title type is used for apartments or townhouses where there is more than one property located on a single parcel of land, and therefore no one individual holds ownership of that parcel. The name of this title type does vary from state to state. There is usually common property and all owners are responsible for the upkeep. Often a strata or owners committee is formed for this purpose.
What do you need to check on a property title?
When you're buying a property you (or more likely your conveyancer) will review the property's title and the contract of sale.
A conveyancer will:
- Check to make sure you are buying from the registered owner of the property (and not someone pretending to own the property).
- Check to make sure there are no caveats or encumbrances on the property that will affect you taking ownership.
- Check if there have been any changes made to the property that are not registered on the title. This is also something to check with the plan of the property registered with the land titles office.
- Check to make sure all easements have been properly disclosed by the seller.
Ownership details
Make sure that you are purchasing the property from the authorised and registered owner of the property. There could be cases where individuals who aren't registered as the official owners of the properties are putting them on the market. It is best to flag these issues so the issue is resolved before the sale is finalised.
Encumbrances
These are restrictions placed on the land, whether by local council, land zoning or for other reasons. Some examples of encumbrances that may appear on a property title are mortgages held by the owner or easements that affect the use of the land.
Easement
An easement restricts the use of the land you are purchasing. These restrictions can range from the ability to build certain structures to the placement of water pipes or drainage on your land. It's important to check for easements both for any future plans you may have for the property as well as the current structure on the land.
Caveats
A caveat is when another party holds a claim on the property, such as a mortgage or other loan. The property's owner can easily remove these caveats from the title before or at the time of settlement, depending on the type of caveat.
Covenants
If there is a covenant on the property title, you should seek legal advice as they typically restrict what you can do or how you can interact with the property. One example of a covenant would be restrictions on the type of materials you can use to build a structure on that property. If there have been changes made to the property, there may be a note about this marked as a covenant. It will also include a copy of the plan associated with the change.
How to search for a property title
Every state and territory has something like a title office or land registry. In some jurisdictions you can search the government sites and access property titles for a small fee.
There are also private services that you conduct title searches for a fee as well.
Your conveyancer should be able to look up a title for you and should cover this in the fee they charge you.
Do I need title insurance?
When you're in the process of buying a property, your conveyancer may suggest you purchase a title insurance policy.
It's a one-off payment that can cost up to $1,000, and is entirely optional. But it can protect you if legal or property issues arise that weren't apparent at the time of purchase (and which your conveyancer couldn't uncover).
For example, let's say the previous owner of your house made some renovations that weren't council approved and you have to pay to fix them. Title insurance could protect you.
How do I add or remove someone from a property title?
You can add or remove someone's name from a property title, depending on the circumstance. This effectively means you're changing the ownership of the property, either by adding a new owner or removing an existing owner.
It gets complicated if there's a mortgage on the property. And if you're adding someone's name to a property they may have to pay stamp duty.
Sources
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We built our home before we got married after being together as de facto for 17 years. My partner took out mortgage on his own and I paid for rent and 2 children. We thought it easier that way at that time. We now have been married since 2006 and built our house and moved into it in 1999. We did not add my name on the deed as planned but would like to do so now. What forms do we need? Cost of adding name? and do we go to Parramatta Office? He has taken this week off work specifically for us to settle this at last, as we have left it for so long. We want to get all affairs properly settled for our two children’s (adults now) sake. Thank you kindly
Hi Florie,
Thanks for your question.
Kindly note that finder.com.au is a financial comparison and information service. As such we can’t give advice when it comes to changing the details of your property deed.
Each state have different processes and fees relating to changing the property deed. It would be best to reach out to the local government agency that handles property titles and deeds to discuss the process and fees in relation to making this change.
Cheers,
Anndy