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Limited Title properties

Discussion in 'Legal Issues' started by scientist, 25th May, 2016.

  1. scientist

    scientist Well-Known Member

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    I'm considering a property that has "Limited Title" appear on its title search - after some google searching I'm aware of what it is (basically something to do with uncertain property boundaries due to not being fully transferred onto Torrens system, or something like that) - I'd like to get your opinions on whether this matters much, whether it would be a deal breaker / huge headache / huge potential risk, or whether this is a small nuisance that can be solved with title insurance / or spend $1500 for a survey, etc.

    Thank you!
     
  2. Scott No Mates

    Scott No Mates Well-Known Member

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  3. bmc

    bmc Well-Known Member

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    yes as @Scott No Mates said, can be resolved by your Registered Surveyor preparing a Plan of Redefinition and subsequent lodgement at LPI.
    Also highly recommended before you start any development as a recent client just found out at McMahons Point. The original Title dimensions can vary once surveyed.
     
  4. scientist

    scientist Well-Known Member

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    Thanks

    If I have the survey done, will the title no longer be Limited and be permanently a vanilla normal torrens title?

    Also typically once the survey is done, will the land size / boundaries vary massively potentially? e.g. from 600sqm to 550, or even more? Just in your experience - I know everything's 'possible' but good to know what's negligible chance vs non-negligible chance.
     
  5. bmc

    bmc Well-Known Member

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    correct, the limitation will be removed and a new Torrens Title will be registered at LPI. you will get a new Lot and DP number.

    its a bit hard to say until some survey work is carried out, nor can I tell just by looking at the cadastral database.
    It can go either way, sometimes an excess of land is found which you can claim however sometimes there may be a shortage. i have found anywhere between 0 difference to +/-10sqm in certain old urban areas of Sydney. Rural can be more.

    Edit: A plan of Redef will cost you around $3500 and LPI lodgement fees are about $1200. once the surveyor knows where your lot is he can probably fine tune your quote. there are some areas in Sydney that are more difficult than others to survey.
    if (if) you find a surveyor that can start it tomorrow allow about 4-6 weeks for LPI registration.
     
    Last edited: 25th May, 2016
    S.T likes this.
  6. scientist

    scientist Well-Known Member

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    +- 10 is acceptable risk, thank you!
     
  7. Propertunity

    Propertunity Exclusive Real Estate Buyers Agent Business Member

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    Just FYI.

    This came from a solicitor acting for my purchaser on a similar inner CBD property, it is followed by a 2nd opinion from another solicitor:

    Solicitor email (who expressed concerns about buying a limited title property):

    As discussed the land is subject to qualified title and limited title. In order to explain these terms you need to understand the difference between Torrens Title land (the modern system of land registration) and Old System title.

    Basically, Old System Title to land is the system we inherited from English law. It requires a chain of (hardcopy and often hand written) deeds to prove title to the land. In order to check that the vendor selling the property is the actual owner of that property and has the right to sell it, you need to follow the paper trail back a period of time (at least 30 years, but sometime further if there anything unusual appears) to make sure the Vendor actually has the right to deal with the land (and no one else has any claim to it). This system is cumbersome and is not guaranteed as accurate by the State, meaning that someone else may appear and claim an entitlement to the land.

    Alternatively, Torrens Title to land is simple-a single document, called a Certificate of Title is issued by the Government which establishes a person's entitlement to the land. This single documents is guaranteed correct by the State of NSW and therefore, no one other than the person registered on the title can sell or claim an interest in the land.

    Over time most land in NSW has been converted from Old System to Torrens Title.

    Qualified Title was introduced in 1967 to help speed up the conversion of Old System title land to Torrens title and is basically a "half way house" between Old System title and full, State guaranteed Torrens title.

    A qualified title has a single Certificate of Title but the registered owner is not guaranteed by the State as accurate. It therefore contains a "caution" warning that the title may be subject to other interests not shown on the register.

    This caution will stay on the title for up to 12 years (or six years once purchased by another person). Once a caution is removed, the title becomes a full, State guaranteed Torrens title.

    Limited Title is created when land is converted from Old System title, but the boundaries of the block of land have not been properly surveyed, so that the location of the land and its boundaries cannot be adequately defined for the State to guarantee the location of the land noted on the title. A "limitation" can only be removed by lodgement of a deposited plan of survey with the Land and property Management Authority.

    The title to your property is both qualified and limited.

    In order for us to adequately advise you that the title related to the land you are purchasing and is not open to any claims from third parties, we need to do two things:

    1. Check the records of the land back to a period of at least 30 years. This requires sorting through old system documents at the Land and Property Management Authority. To do this we would normally appoint an agent and the charges would be time based, depending on what types of records are available to inspect. As an estimation, it could cost between $150 and $500 (or possibly more if any of the records are missing).
    2. Obtain a survey of the land from a registered surveyor to ascertain whether the land you are purchasing matches the description in the deed supplied by the Vendor. An identification survey usually costs between $500 and $1000, but could possible cost more if you require a plan to be drawn to enable the notation to be removed from the title. You will also then have to pay registration costs which could be about $1500 and legal fees for preparing the documents for lodgement.

    If you chose not to investigate point 1 above, you run the risk that a third party may come back and make a claim to all or part of the land on the basis that they had some previous interest to it.

    If you chose not to investigate point 2, you could be purchasing the incorrect house or the house may be built partially on the wrong block of land.

    We are happy for you to proceed without the above investigations, but will have to get you to sign an indemnity that you have received our advice and have chosen to proceed without the investigations recommended.

    Another consideration may be that you may have some difficulty selling the property (within the next 6 years at least), as any prospective purchasers may consider the costs that we have suggested above as a problem.

    2nd Opinion from a solicitor who deals frequently in qualified & limited title:

    His advice to me, was that:

    1. It was not necessary to “Check the records of the land back to a period of at least 30 years. This requires sorting through old system documents at the Land and Property Management Authority.” It is the vendor’s solicitor’s responsibility to provide “abstract of title”. This will be required for any incoming mortgagee (i.e. your lender) as well.

    2. It was not necessary to “Obtain a survey of the land from a registered surveyor to ascertain whether the land you are purchasing matches the description in the deed supplied by the Vendor... nor to pay registration costs ....for preparing the documents for lodgement” He advised that this is really an academic issue but not a practical one. Yes, you can get a survey, but the building codes changed in 1960 and it is unlikely that any of the older properties would comply with current boundary set-backs etc.....so what would be the point of possibly discovering that a neighbour had 20cm of your land?? After such a long period, the law of Adverse Possession might well apply and they’d be entitled to keep it anyway, just as you would be entitled to keep theirs if the reverse applied.

    3. The ‘Limited title’ notation could stay on the documents ‘forever’ without an issue as it ‘drops off’ the title after a period of years anyway.

    4. He does not agree that “you may have some difficulty selling the property (within the next 6 years at least), as any prospective purchasers may consider the costs that we have suggested above as a problem”.

    This solicitor estimated that the conveyancing costs, if you hired them, would be:

    $1,500 + GST for costs

    $250 for normal searches

    $50 for an old system search, all up about $2K.

    I hope this helps allay any fears you or your clients may have. We’ve purchased limited title properties dozens of times before, without issue. It is nothing new.
     
  8. bmc

    bmc Well-Known Member

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    G'day @Propertunity
    2nd opinion may not be entirely correct,
    the "Qualified" encumbrance will be removed as long as no-one comes forward with a claim to the tilte,
    However the "Limitation" will remain until the land is proved by physical Survey and a plan lodged in accordance with the surveying act.

    "highly recommended before you start any development"
    i have a client at the moment that has an excavator sitting quitely on site ($), job has halted while a boundary dispute is resolved, some redesign of the architectuals($) and waiting for the plan to be registered at LPI.

    'Limited Title. Limitation Pursuant To s28T(1A) Of The Real Property Act 1900. The Boundaries Of The Land Comprised Herein Are Not Sufficiently Defined To Enable The Creation Of An Ordinary Folio Of The Register'.
    The limitation has no effect on the registration of dealings and may be removed by lodgment of a plan of survey. Note A folio may be both Limited and Qualified.
    source_Registrar General Directions
     
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