Common property titles you need to know

When buying property, the right to ownership belongs to the person who’s name is on the property’s title. Depending on the type of property you buy, it will have land title deeds associated with the block of land it’s built on.

These are some of the common types of land titles issued in Australia.

Torrens title

Traditionally, when you buy real estate, you’re buying the property and the land on which it stands. This is a Torrens title property; the title is registered in your name and the ownership is transferred to you.

You are given a Certificate of Title that states you are the sole owner and notes any mortgages or other situations affecting the land. If you have a mortgage, the bank will keep the certificate until you have fulfilled your loan.

While there may be situations where you need council approval to renovate your house, you own the land and are responsible for its upkeep.

Strata title

If you’re buying a unit, townhouse or villa, strata ownership will most likely apply, which will also involve more costs. The owner’s corporation – made up of all the unit owners in a building or complex – must maintain common areas used by all residents, such as stairwells, gardens and courtyards.

You will pay ongoing levies in addition to the usual water and council rates. Strata title is an important and ongoing budgetary consideration when reviewing a property for sale.

You should also consider a strata complex’s by-laws – the rules and regulations governing such things as how you may modify your unit, pet ownership, parking, garbage collection and more.

You may also need to get permission from the owner’s corporation to make changes to your new home, for even small improvements such as installing an air conditioning unit.

Company title

Company title generally applies to units and apartments built prior to 1960, particularly apartment buildings built in the 1920s and 1930s. When purchasing a company title property, you buy shares in the company that owns the building, rather than holding an individual title.

Potential owners will often need to pass an approval process established by the company directors. Though company title units and apartments are usually more affordable than strata title properties, there are more restrictions to contend with, particularly in relation to the leasing of the property to a tenant.

Stratum title

Under stratum title the property is divided into lots, so when you purchase a unit or apartment you become the proprietor of your lot. Additionally, you will hold shares in a service company that owns and manages the common property.

The sale of stratum title real estate can be complicated, so make sure you seek legal advice if your dream home falls within this category.

Government leasehold

A government leasehold is when you purchase ownership of a temporary hold on land or property from the government. This form of land title means you buy the right to occupy the real estate for an extended period of time and generally applies to property in rural areas.

Retirement villages

Retirement villages can offer a variety of land title options including leasehold, stratum, company and strata. It is important to seek legal advice when purchasing a retirement village property as there can be additional annual fees and occupancy, purchase and sale restrictions.

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This article does not constitute advice; readers should seek independent and personalised counsel from a trusted adviser that specialises in property, a tax accountant and property design specialist.