Limited Title...help

Discussion in 'Loans & Mortgage Brokers' started by YLN, 4th Mar, 2020.

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  1. YLN

    YLN Member

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    I’m looking at purchasing a property, I’ve had the contract checked and the pest inspection done, all that has come up is that the property has a limited title, given the areas and types of houses we are looking at this is going to become a trend for us.

    My current solicitor has tried to keep me away from it as there is no guarantee the bank will approve the finance on the property and I value her opinion and don’t discount any of that for a second.

    What I’m trying to find is someone who may have more experience with these types of properties and who can assist in strategically building terms of a contract to help minimise the risk on our end.

    I really have my heart set on the property and want to make it happen.

    Our pre-approval is with ANZ and when asking for confirmation from them if we would have an issue with the finance I was advised I would need to get a full valuation on the property I wish to buy the bank will not get a valuation until we have signed and dated contract of sale.

    Looking for some direction.
     
  2. Scott No Mates

    Scott No Mates Well-Known Member

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    You might need to chat with a surveyor experienced in the field of converting from OST to LT to unrestricted. Sounds like City of Sydney or inner-Sydney.

    Check out the LTO.

    Limited titles - Registrar General's Guidelines

    Offer may be subject to satisfactory survey. If the site has progressed to LT, it is already well on the way to becoming a clear title as you won't need to investigate the chain of title.
     
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  3. YLN

    YLN Member

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    Thanks for the quick turn around in response.

    I’ve seen that site whilst doing my research but am still having some trouble understanding how much risk is actually involved as I’ve seen documents stating that possession for 10’s of years would deem the land to remain as is even if a deviation of size is found.

    Is there any surveyors you can recommend?

    Would I need to coordinate with them and a solicitor as well as the bank?

    My main cause for concern is putting down a contract and 0.25% then finding out at the last minute that the bank will not approve the loan and thus losing the deposit.

    It may seem like wanting your cake and having it too, but being my first property I don’t want to make it harder than it needs to be or spend more than I need to.

    Again thank you for your time, appreciate any responses.
     
  4. Scott No Mates

    Scott No Mates Well-Known Member

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    Have a look here on the financial side of things.

    Surveyors: try CMS, @bmc on this forum is a surveyor but hasn't been seen lately, he could help too.

    Refer to the previous thread: Limited Title properties
     
  5. YLN

    YLN Member

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    Thank you I’ll try CMS, those links are ones I found today also which has given me some hope but I also stumbled across this in my searches:
    Lenders who will lend on inner city Limited Title?

    Which has thrown a spanner in the works given the recent date on it.
     
  6. Scott No Mates

    Scott No Mates Well-Known Member

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    That was over a year ago but you'd need to chat with your broker.

    Check the title as it should show who is the current mortgagee (is it possible to gain finance with them if they're already bearing the risk)?
     
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  7. YLN

    YLN Member

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    I believe it was a straight title swap with her sister as it’s an elderly lady that needed to move closer to where her husbands nursing home was going to be, now he is in that home they’re selling so I don’t believe there to be a mortgage on the property.

    It seems to be something that would have to be common for buying older houses, but for some reason impossible to get a straight answer from the banks. We are pre-approved direct with ANZ
     
  8. Scott No Mates

    Scott No Mates Well-Known Member

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    Try another bank via a broker who could advise of the most friendly bank. Other posts show this doesn't satisfy ANZ's risk appetite.
     
  9. YLN

    YLN Member

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    Appreciate the feedback thanks for taking the time to read and assist, wasn’t expecting a turn around as quick as this.
     
  10. jrc

    jrc Well-Known Member

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    Limited title in NSW was part of the process of conversion of old system title to Torrens title. It means the registrar general does not guarantee the boundaries. It is simple to fix with a full survey meeting the LTO requirements. Get an estimate of the cost and negotiate the price down.
     
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  11. YLN

    YLN Member

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    From most things I’m reading online it looks like we’d be up for $5-10k in surveyors, fees and legal.

    However when talking to surveyors most are telling me it’d only set me back $350-850 to clear the limited title.

    Getting myself confused, all the information pasted above is what I read and assumed to be accurate especially once I realised it was the same as what I found. CMS seem great and look like they’re easy to deal with and very affordable, awaiting a return phone call to further discuss but the gentlemen I spoke to was of the impression based on what I was presenting, that there wouldn’t be a lot of cost involved and it’s something they can do and submit.
     
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  12. Scott No Mates

    Scott No Mates Well-Known Member

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    The cost seems light on, possibly doesn't include any of the LTO costs or legal work (if any).

    Did they say how long the changes would take?

    How did you go with a broker?
     
  13. YLN

    YLN Member

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    Haven’t spoken to a broker yet tbh it’s what I see as the last resort, I think where I’m at currently is trying to negotiate terms with the real estate whereby if we do get knocked back by the bank because of the limited title then we’d like that to be grounds to have our 0.25% deposit refunded.

    I don’t know how likely that is, again because this is our first time but ultimately from my discussions I had with my bank manager yesterday they’ve advised:

    • A fully property evaluation can only be initiated once a signed and dated front page of the contract is received.
    • Not all purchases require a full evaluation.
    • If the property is approved unconditionally then there won’t be a need for a full evaluation and therefore the limited title wouldn’t come up.
    • Even with the full evaluation, the limited title is rarely an issue unless it impacts the value of the property and may just require surveyors reports to satisfy (if they deem it necessary).
    After talking to CMS and being able to relate that thread about ANZ knocking back their loan due to the limited title, I’ve come to the conclusion that the inner-city properties will more than likely be the ones the bank will favour less due to the already overinflated prices and the limited about of space between properties, therefore there’d be a much bigger risk in the banks eyes. This is just my perception and understanding from what I’ve read and understood by talking to CMS, the bank and the forum here.

    As mentioned above I think where I stand is just wanting to try get the definitive answer now on the costs associated (thank you for referring to the LTO and legal, I can ask specifically today) and once I have those total costs I can build my offer around those and try negotiate the terms to cover my 0.25% in the event the loan is declined on the basis of the the title.

    In your honest opinion how likely do you think that would be? As I’m aware it probably sounds like “so you want us to hold the property and then if something goes wrong you want the only collateral we have back...right”
     
  14. Scott No Mates

    Scott No Mates Well-Known Member

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    Getting the title cleared before settlement will be unlikely, just like getting someone to accept that sad a condition of sale. Best bet is to change to a different lender who accepts LT and get the ball rolling conditional on acceptable finance and subject to survey.
     
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  15. YLN

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    So basically my offer is subject to finance and surveyors report?

    if either come back unsatisfactory does is that grounds to ask for a refund of my 0.25%?
     
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  16. Marty McDonald

    Marty McDonald Mortgage broker Business Member

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    I’ve done one limited title. Lender was Suncorp they made us get a survey done. It was a refi so no time issues. However from my research at the time many lenders dont appear to have any issues as long as valuation is ok. I’d suggest cba and many others wouldn’t require any survey
     
  17. Morgs

    Morgs Well-Known Member Business Member

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    What does your conveyencer say? Presumably they'll have seen this before and will be able to advise you on how to structure an appropriate offer.
     
  18. Perp

    Perp Well-Known Member

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    May I ask why? A broker in the area will probably have dealt with this before, and can offer enormous assistance in identifying the appropriate lender.
     
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  19. Scott No Mates

    Scott No Mates Well-Known Member

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    All the more reason to deal with experienced players (the unknowns can be resolved and fruitful if you are in control).
     
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  20. YLN

    YLN Member

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    I’ve approached a second solicitor for a second opinion and have a bit more confidence in that solicitor however they seem to believe there’s no way of structuring my offer in a way where my 0.25% deposit will be secured/refunded if those terms aren’t met.

    Just had a positive experience with my bank manager direct and never knew limited title was a thing so didn’t think I needed anything outside of the norm.

    I’m trying to find a solicitor/conveyancer that will fill me with that confidence but ultimately haven’t had luck. Again, I fee the 2 I’ve contacted are great in their own ways but just not providing the angle I need, I’m not sure if what I’m asking is unreasonable or not so I don’t want to judge them without knowing myself if I’m asking something reasonable.