Learn more about property titles in NSW, including the Strata, Community, Old System and Torrens Titles. What are the advantages, regulations and rights attached to each? When buying a home in NSW, you should be aware of the different types of property ownership. Each title has its own unique restrictions and obligations. In NSW, the Torrens title is the most common form of property ownership. Let’s take a closer look.
What Is A Torrens Title?The Torrens title system of property ownership was introduced into New South Wales in 1858. It is the most common and is also known as freehold title. The name registered on the title deed is the legal owner of the land and any buildings. When the house has a mortgage, a Certificate of title will be issued until the loan is paid. The system allows ownership of a property by registration with the Land Titles Office. The NSW Land Registry Service maintains the electronic record. The creator of the Torrens title was Sir Robert Richard Torrens, who was the third Premier of South Australia. Each landholding has a single register, which is updated with each new transaction. Having one single document or folio helps to avoid missing documents and complications. The State Government of NSW guarantees the Torrens system, confirming that the name on the registered land title is the property’s true owner.
What Other Types Of Titles Exist In NSW?When purchasing property in NSW, you also own the legal rights to the land. The system in which the property is registered will vary, and you must understand the rights and obligations associated with each title. Understanding the difference can help you make an informed purchaser’s decision.
Strata TitleUnits, apartments and townhouses are often owned under a strata title arrangement. This means that you only own part of the building. For example, with a unit, you may only own the inside of the unit. Different people can own different parts of the building. The outside and common areas such as stairwells, lifts or gardens are deemed common property, meaning you have a shared interest with other owners of the strata complex. Owners of the individual units will become members of the owners corporation, and improvements or changes to your property will generally require consent from the owners corporation. In many cases, the owners corporation will take care of the maintenance and finance of the communal areas. You will most likely have to contribute payments or levies on an ongoing basis. Your lawyer can obtain a financial report from the owners corporation, which will detail the amount of levies paid by other properties in the strata complex, and their financial state. A strata title home is usually cheaper than Torrens titles as there is generally no land attached.
Community titleA community title is commonly used for gated estates or large development subdivision lots. They are similar to both Strata and Torrens title properties in that as a property owner you will still own your individual property and land. The common property areas such as the tennis court, gardens and parking area are managed by a residence committee instead of a strata management group. The property owners are jointly responsible for the maintenance, and as such, payments or levies to a group fund will be required for ongoing repairs and upkeep to common property areas.
Leasehold TitleA leasehold title will generally apply to government-owned land. As a lessee, you will not own the property but can lease it for an extended period, in most cases 99 years. You will be required to pay an initial cost as well as ongoing rental payments.
Old System TitleThe old system title property ownership is one of the oldest in NSW and dates back to 1788, early colonisation days in Australia. It records the history of ownership as each transaction of purchase is attached to the title. It is not as common as a Torrens title, perhaps because title documents get lost under this system as there is a substantial paper trail attached to each property deed. As with a Torrens title, an old system title enables ownership of the house and land in its entirety.
Pros And Cons Of A Torrens Title?A Torrens title is the most common form of property ownership in NSW. Understanding the benefits and risks can help you make an informed decision before purchasing your home.
Pros Of A Torrens Title
- You can make changes to your property without prior approval (other than local council)
- Ongoing repairs to your home can be made at your convenience
- No pet limitations (subject to local council guidelines)
- No parking restrictions
- Greater privacy
- Less noise disturbance
- Owning a house with land can contribute to a healthier lifestyle
- Simple system of ownership
- Security of your land with the registration of a title
Cons Of A Torrens Title
- More expensive than a Strata title
- Financially responsible for all repairs and maintenance
- No ownership history on the title (to reflect family-owned property through the generations)
- More area both indoor and outdoor to maintain
- More at risk to natural disasters and extreme weather damage