Limited Title

Hi PropertyChat,

I have just purchased a house and settlement is not for 2 months. However, the land has been noted as Limited Title. This means that the boundaries of the land have not been properly determined in a really long time and that I actually can't prove what land is mine if challenged.

I've been advised by my conveyancer that the limitation may be removed if I lodge a new 'Deposited Plan' which satisfactorily defines the boundaries of the land.

Is this worth doing and how much should I be spending to get this across the line? Any recommended companies would help.
Land size is 125m2 in Sydney. Building built in 1880.

Any feedback welcome
Thanks
Nicollo

 

I've never heard of that sort of title before. NSW old school thing?

Hopefully you have an experienced property solicitor/conveyancer guiding you on this one?

 

@nickthegun - a registered surveyor should be able to help you out or advise you @bmc could flick you a few crumbs.

Essentially, to move from limited to torrens without restriction, you will need a new survey to be undertaken, this will include investigation of the boundaries of the adjoining lots (which may have already been done and will ease the burden). Once the investigation of the block has been completed and a new plan registered it will be unqualified.

This work is becoming less common as much of the work has been done over the last 30-50 years.

There may also be some areas adjoining your property eg. redundant dunny lane which may have also been defined and may at some stage (10+ years time) be subject to your claim for adverse possession if your fence has been around it.

 

I have purchased a few properties with both limited and qualified title.

Technically, your conveyancer is correct, HOWEVER, there is a more practical aspect to take into consideration before you go down that route spending money un-necessarily.

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”.

 

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.

 

Thanks for the detail @Propertunity

I've just spoken to my conveyancer who suggested that in the area that I bought there is alot of Limited Title and rarely people follow through with a deposited plan. Essentially everyone just assumes that the fences are in the right spot (which seems reasonable). He also said it would cost about $10k to do a full deposited plan.

He suggested that 'Title Insurance' might be an option to protect me in the case of some sort of loss due to the boundaries not being in the right spot down the track but that is about $1k. I'm not going to opt for this.

I'll just put my faith in humankind that no one has done a sneaky with the fences!

 

Limited Title properties

@nickthegun your conveyancer guessed about right, could go up to 10k for a difficult or large site.
your lot is probably Old System Title, that is the old common law before the instigation of Torrens, referred to as Limited on the notations.
the limitation on the title can only be removed by survey. [Insert a whole lot of boring survey regulations etc] and you end up with a new Lot number in DP ### on Torrens Title. the dimensions are then clear and defined.

if you're happy with what you have purchased visually (within the fences) then it should be ok. if you plan to develop, knock down, extension etc. then you will need the boundary sorted out. Some councils aware of Old System title in their area will sometimes require the boundary to be resolved, or usually your surveyor will advise you if you need too.

i happen to be starting one tomorrow in Clovelly.

 

that letter must be at least 20 years old

 

Is there a possibility when trying to remove a limited title notification, that there are boundary disagreements with a neighbor that could stop a land owner from converting to a full torrens title?

 

simply put, there are procedures, a hierarchy of survey evidence, and survey regulations (surveying act NSW) that we abide by to determine (re-position) a boundary.
if you own an old system parcel of land, depending on our findings it may in some circumstances, equate to an excess of land or a shortage (relative to title deed). the resultant dimensions found are proved to exist by measurement.

With a combination of fact, law, precedent and experience, the Registered Surveyor's plan will show justification and upon approval at LRS, subsequently registered.

if an adjoining owner disputes the boundary location they can make an application (fees apply) to the LRS registrar general for a boundary determination. The LRS will review the supporting evidence (as supplied by the applicant) and make a judgement if further action (amendment) is required.
however this will not stop the owners application to have a limitation removed and a Torrens Title issued.

 

Thank you! That answers a long mystery for me