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What is Limited Title?

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What is Limited Title property?

In some relatively rare instances, your solicitor or conveyancer may advise you that the property you are intending to purchase is ‘limited title’.

What does this mean? In short, this means that the boundaries of the land have not been verified by the Land Registry. It’s not necessarily fatal but it may have some consequences for your bank finance or require additional surveying costs to rectify.

Why does it exist?

Prior to 1862, New South Wales had an antiquated system of land ownership which involved having to establish title to a property by examining decades of deeds and records of transactions. The ‘new’ system, called ‘Torrens Title’, effectively says that registration is paramount and he who is registered as the owner of the land is the legal owner. A simple but very important development.

In the mammoth process of converting so-called ‘old system’ to ‘Torrens title land’ the Land Registry did not get the chance to examine every lot and verify its dimensions or inquire as to whether there were subsisting interests on the land (e.g. rights of way or easements).

What does it mean?

In all likelihood, in 2020, it would likely mean very little. If the dimensions and boundaries of the land were disputed one would think that this issue would have already come up. Similarly, with the existence any unregistered easements etc.

However, a lot of banks are still cautious about this as, theoretically, there could be a major misdescription on the boundaries or there may exist easements etc. which would affect their security. For that reason, some banks don’t lend against Limited Title or lend at reduced leverage ratios.

You need to consult your broker if your conveyancer/solicitor indicates the land is Limited Title for this reason.

What can be done about this?

In fact, the ‘limited title’ warning can be removed by an owner if they can provide a certain report on the land by a surveyor called a ‘plan of redefinition’. In our experience these plans cost in the range of $2,000 – $3,500 and generally require about 4-6 weeks for to be registered.

It is possible to make the registration of a plan of redefinition a condition of your settlement. Speak to your conveyancer or solicitor about this possibility.

If you have any questions about this article, please contact the office on 1800 870 407 and one of our solicitors/conveyancers will be able to assist.

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