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Your Melbourne Property Title

Mellbourne's land titles are held in Victoria's land titles register, managed by the Register of Titles using the Torrens system. What's the difference between Torrens title, a strata title property, community title or company title? What are the different encumbrances on title?

Land Titles 

Torrens Title

Torrens title is the most common form of land title in Australia. All previous and current owners are listed on the one deed - the Certificate of Title or Deed of Grant - as are all previous mortgages, charges and encumbrances. Registration at the Land Titles Office is necessary to effect the legal transfer of ownership.

Strata Title

Strata title is the most common form of home unit title in Australia. The essence of strata title is that each unit owner in a building owns the "air space" in which his or her unit exists. A strata title can be registered and the owner can mortgage the property as if it were land.

To administer the common areas of the building (such as stairwells and driveways), an owner's corporation (previously, body corporate) is formed. Each unit owner is a member of the owner's corporation and they contribute funds to cover common expenses for items such as building maintenance and insurance.

Company Title and Community Title 

Did you know that company title and community title are types of property title, which, due to their restrictive natures, are generally not favoured by financial institutions?

Under company title, the land and the building are owned by a private company. Purchase of a certain number of shares in the company entitles the buyer to exclusive possession of a part of the building, such as a unit or a garage. A company title may affect the value of the property, its saleability and its attractiveness as security to a lender because the private companies who own the building often make decisions regarding who may buy shares in the company, who may occupy the building and, if the unit may be leased, to whom.

A community title generally allows owners of lots in a subdivision to share access to facilities on communal land, such as parklands and recreational facilities such as swimming pools and tennis courts. An association of the lot owners manages these communal assets.

Encumbrances

These are impediments or restrictions to the use or transfer of land, which include easements, mortgages, caveats and covenants. Encumbrances could reduce the development potential or limit the use of a site, which could have a bearing on the site's value.

Easement

An easement is a right which a person has to use land belonging to another in a particular manner. An easement generally benefits one parcel of land by providing advantage to it (the Dominant tenement) and burdening another (the Servient tenement).

An easement on your property title means that yours is the burdened land. The easement could be for the benefit of the utility authority or telco for the purpose of laying underground electricity/telecommunication cables or water pipes, or it could be a right of way for the benefit of an adjoining neighbour.

Mortgage

A mortgage is a contract between the lender (mortgagee), and the borrower (mortgagor) whereby the mortgagor’s property becomes security for money lent by the mortgagee. The debt becomes a charge over the real estate.

The mortgage is a statutory charge or security only and not a transfer of land. The mortgage confers an interest but no estate and the mortgage charge is created upon registration of the mortgage on the certificate of title.

Caveat

A
caveat is a "warning to the world at large" that a third party has an interest in the property. Its effect is to place a restriction on title. 

Covenant

A written agreement between the seller and purchaser of a property restricting the use of the property or dictating the allowable uses of the property. Example: construction must be of a certain colour of bricks and roof tiles, no home offices, no commercial vehicles.