Last weekend I attended the Australian Real Estate Conference (AREC) on the Gold Coast. Apart from enjoying some awesome weather conditions following the rain we have had here at home, there was some great content ranging from sales training to inspirational stories and data on where the Australian property market is heading.
REA (realestate.com) provided some insights on where they see the market heading over the next 10 years based on their research and data. We all know data is becoming a currency unto itself and REA certainly has plenty of it. One of the trends they predict is that First Home Buyers will be entering the market later in life, ages 35-40 and that they will be starting their property journey in Strata Title properties, rather than Torrens Title homes with big yards. The idea of the ‘quarter acre block is dead’ as land sizes have been shrinking over time. Future first home buyers will also be entering the market with inheritance playing a key role in their ability to do so, as property prices continue to increase in an aging population.
This has led me to break down the different titles available when it comes to property.
So, lets talk the ‘Heavy Weight Titles’ of Real Estate!
In New South Wales (NSW), Australia, property ownership is regulated under various title systems, each defining the rights, responsibilities, and limitations associated with land ownership. The most common system in NSW is the Torrens Title, but there are several other types of property titles, including Strata, Community, Company, Leasehold, Old System, and Limited Title. Understanding these distinctions is important when buying, selling, or managing property.
1. Torrens Title
Torrens Title is the most widely used and provides the highest level of ownership certainty. Under this system, ownership is registered with NSW Land Registry Services and backed by a government guarantee. The title lists the owner and any interests (such as mortgages or easements) in the property. It simplifies conveyancing by removing the need to trace past ownership.
2. Strata Title
Strata Title is used primarily for multi-dwelling buildings like apartments and townhouses. Buyers own their individual lot and share ownership of common property, such as the building, gardens, foyers, and driveways. The property is managed by an owners corporation (formerly body corporate), which maintains common areas and enforces by-laws.
3. Community Title
Community Title is similar to Strata Title but typically applies to larger estates with shared recreational facilities such as parks, gyms, or tennis courts. Each owner holds a freehold title to their lot and shares ownership of community property. Management is overseen by a community association under a management statement that governs shared responsibilities and costs.
4. Company Title
Company Title is a less common form, usually found in older apartment buildings. Buyers purchase shares in a company that owns the entire building. These shares grant exclusive rights to occupy a specific unit. Unlike Torrens and Strata, there is no individual land ownership. Obtaining finance or selling can be more complicated due to the share structure.
5. Leasehold Title
With a Leasehold Title, the land is leased for a set term (commonly 50–99 years) from a government or private landowner. The leaseholder owns any buildings or improvements but not the land itself. At the end of the lease, land rights revert to the owner. This title is common in areas like Sydney Olympic Park and can affect long-term property value and financing.
6. Old System Title
Old System Title predates the Torrens system and requires a “chain of title” to prove ownership through historical documents. It can be complex and expensive to deal with and is mostly phased out. Most properties under this title are converted to Torrens when sold or subdivided.
7. Limited Title
Limited Title arises when the boundaries of a parcel of land cannot be definitively verified, usually due to incomplete or outdated surveys. These titles are often the result of converting Old System land into Torrens Title without full boundary investigation. While ownership is recorded, the title is marked as “limited” to indicate potential uncertainty about the land’s boundaries. Owners of Limited Title properties can apply to have the limitation removed through a survey and formal application to NSW Land Registry Services. Until then, boundary disputes may be harder to resolve, and lenders may be cautious about financing.
Each title type has legal and financial implications, influencing ownership rights, resale value, and obligations. When dealing with property in NSW, it’s crucial to understand the title structure and seek legal advice where necessary to avoid unforeseen risks.