What's on The Title?
You will find:
- the names of the owner(s) of the land;
- description of the land;
- easements;
- mortgages;
- Caveats; and covenants.
Multiple ownership
You can own a property with another person in a number of ways.
- Joint tenancy (this is not an accurate description, because the owners are not really "tenants"): Joint tenants are just that - they own the property "jointly". If one dies the other automatically inherits the property. This is usually the way property is owned by married and de facto couples. Joint tenants own equal shares of the property.
- Tenants in common: Tenants in common can sell their share of the land or leave it to any person in a will. Tenants in common can own the property in equal shares or on any other basis, e.g. 70% - 30%.
Easements
An easement is something that restricts the ability to use the land, for instance, a right of way across the land for supplying power or sewerage drainage.
An easement is important because it might mean you can't build over it. It's also very important to check whether there are any buildings over an easement.
Mortgages
A title search will tell you whether the seller has a mortgage which has been paid out (this is called discharged). If it hasn't been discharged (which is usually the case) the mortgage must be paid off at settlement - usually the seller will re-direct part of the money they receive from the sale to pay off the mortgage. You will then be given a document called a "Discharge of Mortgage" which must be lodged at the Land Titles Office.
Caveats
A caveat is like a warning sign. It alerts you that someone else claims an equitable interest in the property, e.g. the seller has a personal loan and this is secured against the property. If there are any caveats on the title, a Withdrawal of Caveat must be given to you at the settlement. If there is a caveat, get professional advice before you buy.
Covenants
A covenant is like a promise that must be kept by each new buyer of a property. It can affect vacant land or land that is built on.
Usually covenants are "restrictive", which means they stop the owner of the property from doing something. For example, a restriction on the type of materials that can be used in any building on the property.
The covenant usually appears on the title. If there is a covenant, it is important to get professional advice. Your advisor should make sure that you fully understand the implications of the covenant. Remember that it is not easy to remove a covenant from the title.
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