Whether you are buying your first home or a commercial investment property, it is important to have an understanding of the more common forms of property ownership used within New South Wales. Different title types have regulations unique to their form and can have varying charges attached to them. Knowing the difference can assist you to make an informed choice before buying property.
Torrens Title is the most common form of property ownership in New South Wales. Also referred to as Freehold Title, this system of ownership was introduced in 1858. Torren Titles are registered with the state government and providing there is no mortgage on the property, the land is completely owned by the persons registered on the Certificate of Title (also known as a ‘Title Deed’). If there is a mortgage on the property, the mortgagee generally holds the Certificate of Title as security until the loan is paid. Your name as the owner will appear on the Certificate of Title but the mortgage will also be registered here to show the interest the mortgagee has in the property.
Old System Title
Property ownership of this kind dates back to when New South Wales was first colonised in 1788. Because Australia was colonised by the English, the system used to track property ownership also came from England. Old System title uses a system of registration that uses a separate document every time the land is purchased by another party. As the number of transactions in relation to the property increases, so does the number of documents attached to the title of the property. This way you can see the paper trail of how the property has passed between people. It is very common for Old System Title documents to go missing because of this. Like Torrens Title, owners of Old System Title own the interest in the land completely. It is now uncommon to own property this way as it has been replaced by Torren Title however, it is still possible.
Strata Title is very common when looking at apartment blocks, units and town houses. Owning a property under a strata arrangement generally means that you only own part of a building and have shared interests with other owners of the strata complex in regards to common property such as gardens or stairwells. For example, with a unit, this means that you generally own the inside of the unit but not the outside walls or fixtures as they are generally deemed common property. It is very common for strata properties to be run by a strata management company who control the upkeep, maintenance and finances for the common areas. If you purchase property that is a Strata Title you will generally be required to make quarterly payments into the sinking fund and administrative fund for your share of the common property on a continuous basis.
Leasehold arrangements generally apply to government owned land. With this type of arrangement, you do not own the property outright but instead lease it for an extended period of time, generally 99 years. As the lessee, you will be entitled to occupy the land for that entire period. When entering into this arrangement, there is an initial cost for the Leasehold arrangement (negotiated between the parties) as well as annual rental payments. Terms and conditions for Leasehold agreements vary.
Community Titles are most often used for large development lots and for gated estates. It has some similarities to Strata Title but generally it is the property owners that are jointly responsible for maintaining the properties. Instead of a strata company, there is often a residence committee or a manager that ensures the upkeep of the property. Community Title schemes generally maintain their own roads, gardens and garbage facilities (including collection). Whilst Community Title owners still receive service from their local council, they are often limited. Buying into a Community Title arrangement, like Strata Title systems, require continuous payments in order to account for your share of the upkeep.
When purchasing property under any of these schemes, it is important to speak to a conveyancer or lawyer with Property Law experience to help you understand the complexities and requirements under each kind of title. If you need further information or assistance please contact:
This blog is merely general and non specific information on the subject matter and is not and should not be considered or relied on as legal advice. Coutts is not responsible for any cost, expense, loss or liability whatsoever in relation to this blog, including all or any reliance on this blog or use or application of this blog by you.