Ready to buy a property and need more information about title searches?
Recent statistics from the 2021 census revealed that fewer Millennials own their home than those from Generation X and Baby Boomers did when they were the same age. Despite the common consensus that your 20s and 30s are the best time to start ‘adulting’ and get married, have kids, buy a house etc., the results of the census reveal that not only are less Millennials living in their own home, but there has also been an increase in this age cohort living in a couple household without children (sorry about the ‘no grandchildren yet’ thing mum).
But…if you are one of the few who has managed to squirrel away your savings by avoiding brunch and coffees (11/10 adulting to you), you’re probably starting to hear a lot of new ‘house buying terminology’ and may be wondering what all this means. To make sure you look like a boss when your real estate starts busting out their techy real estate jargon, we’ve broken everything down about the first step (and perhaps the most important) in the house buying process…the title search.
Although you might be ready to put in an offer for your piece of paradise, there’s a few things you need to tick off first to make sure you aren’t buying a property that could cause you some problems later down the track.
A property title search, also known as a Certificate of Title, is a legal record that will show who the current owners of a property or block of land are. A title search is also useful in revealing if there are any restrictions or interests on the land, which may influence any grand plans for the property you may have already been flirting with. Restrictions and interests on the land are shown in the title search as easements, covenants and caveats…and it’s important to know what these mean before you say ‘yes’ to the address (don’t go stealing that banger of a reality tv show title E!).
To be sure that the people selling you the property have the legal right to do so, your title search will tell you who the owners are of the property and how many people are listed on the title. In the case where there are multiple owners listed on the title search, these will be referred to as Tenants in common or joint tenants.
Tenants in common have individual shares in the property and will likely receive this portion of the property sale price or this will be distributed according to their will. Joint tenants refer to people who permanently live together (most likely a couple) who intend their share of the property to be distributed to the other owner in the case of their passing.
So make sure to double check your sale contract and that the owners names align with those listed on your title search!
Do you ever imagine yourself retired, drinking your cup of tea on your porch watching passers-by closely to make sure they don’t mess with your lawn….no…just us? Well, there’s actually a good reason for it.
An easement on your title means that someone who doesn’t own the property has a legal right to access your land or property for a specific purpose. For example, this could range from a ‘service easement’ which allows council workers needing to access something like an electrical pole or pipes in your backyard to fix an issue affecting the neighbourhood.
Additionally, your property may also indicate there is a right of way easement, which means that your neighbours or workers have a right to access your land and restrict you from being able to build on top of these sections of land.
It is important to be aware of any easements before proceeding with your purchase as this may affect any renovation or future selling plans. If you’re still set on your dream property and have a solid plan to overgrow the grass in that section of the property or put up a big, heavy gate…you may want to read on about covenants.
Covenants are agreements and/or restrictions on the land or property and can be positive or negative. Covenants can be positive (requiring the property owner to do something…like having a regularly mowed lawn…eugh) or negative (restricting the owner from doing certain things).
An example of this can be as simple as what materials can be used to build & colours that can be used on the external of the property to retain the quality, look and feel of a building or neighbourhood. Breaching a covenant can get you into a bit of strife, so it is a good idea to double check if there are any listed on your title search that may throw a spanner in your planning.
*checks for covenants about overgrown grass*
An important one to take note of in the initial and final stages of purchasing the property!
A title search will show if there is a mortgage on the property and in most circumstances a bank or financial institution holds the Certificate of Title as opposed to the property owner. As such, the institution providing the mortgage will be listed on the title search report for the property. If you are purchasing a property, it is important to confirm that the seller has discharged the mortgage before settlement so you do not face further delays with purchasing your property.
Finally, make sure to look out for any listed caveats. A caveat is a warning that someone else has an interest in the property that isn’t the mortgage holder or the current owners.
A caveat means that someone has lodged a claim against the property, and this will stay with the property and it will not follow the previous owner wherever they move. For example, if a builder has completed works on a property but is awaiting payment they may lodge a caveat on the title, and if the previous owners don’t clear it up prior to you moving in…guess who gets stuck with the bill?
If you pointed to yourself with 2 thumbs and said “this guy,” we’re proud you did that…but make sure you take notice of this when you do your first title search, and as close to settlement as possible to avoid getting lumped with a bill you can’t put on Afterpay.
So now that you’re ready to nod along knowingly as your real estate agent or conveyancer talks you through all this, once you’ve found your property you can download your title search for all states in Australia through InfoTrackGO and see if this is the perfect property for you!
Now…go and peel off those command hooks and tabs from your walls (maybe even for the last time), pop the kettle on to enjoy some people watching from your very own porch. And who knows, if your property has an easement listed that you’re willing to overlook…it’s never too early to start working on your neighbourly growl.
*Most title searches are available within 5 minutes from time of purchase, however please allow up to 7 business days in the instance of delays incurred by the report authority.
