Different Property Titles and What They Mean
Did you know that there are more than half a dozen different property titles in South Australia? Our guide helps you understand the key differences.
Australian property ownership transfers are recorded in a registry, in SA it’s the Land Services and Lands Title Office.
Thus, you can scan through an online database for a particular area to find out more on the history of a specific property.
The online registry maintains records for every property in a given state or territory.
Here is a brief summary of the different property titles you may encounter.
Freehold or Torrens
This is the most common title you’ll see in real estate. It’s guaranteed by the government and used in all states and territories. As long as there is no mortgage, this kind of title guarantees the property is entirely yours.
Old System Title
The “Old System” refers to the time when there wasn’t a centralised arrangement for registering property ownership. With time, most properties transferred to the Torrens title system.
Those few properties that were never switched over retain what is called an Old System title.
Qualified and Limited Torrens
Qualified Torrens Titles are often applied to properties that used to be part of the Old System but have changed over to Torrens. Because of the transition, the property isn’t quite cleared for granting you total ownership. There may yet be others with more of a claim than you.
A Limited Torrens Title property doesn’t have well-defined legal boundaries. That is, it’s unclear where the physical boundaries are. Some lenders may require that you have the property surveyed to check the boundaries before offering you a loan.
Strata or Group Title
Both residential and commercial property can come with a Strata title. This kind of title indicates that there is some condition on the title due to multiple buildings being covered on a single parcel.
While the separate buildings and units may have unique owners, all existing structures outside of those are considered shared property.
The Strata Community arrangement means lower fees for all involved but also a little less freedom.
Before picking up a Strata property, you should make sure you know just what kind of limitations you’ll face.
These are very similar to the Strata title system. Community titles allow entire communities to pay for neighbourhood maintenance and the use of shared facilities such as swimming pools and tennis courts.
Strata and Community titles differ in that Strata usually applies to individual units (like apartments) while Community applies to entire plots of land.
Additionally, Strata corporations are required to ensure building upkeep. In a Community title arrangement, everyone is responsible for insuring everything on their own plot.
A company title often involves purchasing a share of the company-owned property in return for a living space. Reselling the shares is difficult, making this an unpopular method for owning property.
Are you looking at property in a rural area?
Leaseholds are common in less urbanised locales so do your research before buying.
For this kind of title, you might put a certain sum of money down upfront and then make annual payments.
Before you look into buying in a retirement village, you’ll need very specific and personalised advice. Retirement village units may come with a variety of titles (like Strata or other community ownership) along with various financial restrictions.
Moiety or Cross-Lease
A moiety is an outdated and rare title arrangement in which unit shareholders essentially lease living and common areas from each other. This kind of title can potentially be transferred to a freehold title.
Your property title could impact your loan finance deal, as well as other ramifications. Contact the experts at Funding Options for a no obligations discussion about your plans.
– Dom Cassisi, Managing Director