What is a Certificate of Title?


The Certificate of Title (CT) contains information on a property such as the type of estate, proprietor(s), legal description, and interests.  Often there is also a map / diagram showing the boundaries and footprint of any buildings.

Types of estate include Fee Simple (most common), Leasehold (including crosslease), and Unit Title.

Fee simple basically means that you are buying the ownership (Title) to the land and buildings (“improvements”).

Leasehold means that someone else holds the ownership of the land and you are only buying the improvements.  There is likely to be a ground lease in place and you will have to pay rent to the owner of the land.  This can be quite a substantial amount annually and will be reviewed (increased!) regularly.

Crosslease is also a form of leasehold property, but there is no ground lease payable (usually an agreement for something like 10 cents or one dollar, but not collected).  Crosslease title came about when land would fit two (or more) houses, but was not able to be subdivided.  The land is split into shares (e.g. a half share, or 1/3 share in the whole site), and each house has their own exclusive use area.  There are some crosslease rules, so do check with your solicitor before purchasing.  Crosslease is not necessarily a bad thing though because the smaller land portion makes the property more affordable.  My husband and I have bought multiple crosslease properties.

A Unit Title is just as it sounds.  Units, flats, apartments are divided up into individual saleable pieces.  You buy your unit, but you don’t get any land with it.  Your ownership basically extends to your unit and your parking space.  There may be some communal land that you have use of.

The Proprietor is the legal owner of the property.  You should check that this name matches the vendor’s name on the sale and purchase agreement.

The Legal Description of the property is something along the lines of Lot number x on Deposited Plan (DP) xyz.  Even without street names and numbers, your piece of land could still be identified.

Registered interests on the title are things to be aware of.

The most common interest you will see registered is a mortgage in favour of a bank.  This is nothing to worry about.  Your solicitor should make sure this is discharged (paid off / released) before you take over the ownership of the property.

Easements are registered to allow others access rights over your land.  This might simply be that there are services (water, power, telephone etc.) running through your property to service the neighbouring properties; or it could be that your neighbour has the right to use part of your driveway to obtain access to his/her own property – a common “right of way” situation.  If you are intending to do any development (e.g. subdivision) you’ll need to check that there are no easements to get in your way.  Hill sites often have drainage flows running through them from the properties higher up the hill.  This could really limit the amount of land that you have available to build on.

Covenants are rules put in place by developers.  Personally I’m not a fan of all of these rules.  If you’re buying the land, then I think you should be able to choose what sort of house you put on it!  The argument in favour of the covenants is that they are to maintain the quality of the area.  Typical rules are to do with the size, construction, architectural features, landscaping etc. of your new home.  If you are buying an existing house, these construction requirements will have already been met, but be aware that many covenants exclude pets from the neighbourhood, limit colour schemes, limit fencing, and some go as far as to ban you from owning a chainsaw!

Ocassionally you might find a property with a caveat on the title.   A caveat can be registered by someone who wants to prevent any dealings with the property.  They might have a financial dispute with the owner of the property, or believe they have an interest in the property.

The map / diagram of boundaries and buildings can be useful to check that the fences and buildings are positioned correctly within the boundaries.  If you have any doubt, you should discuss this with your solicitor.

 

 

 

 

 

 

 

 

 

 

 

 

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