What is the difference between a Community Title, a Torrens Title, and a Strata Title?
A Community Title, a Torrens Title and a Strata Title are names that won’t mean much unless you’re well versed in property conveyancing or real estate legislation. You’re probably curious if these have any significance to you purchasing a property. The answer is yes, these can have a significant impact on your property, and you should be well-versed in understanding these before you commit to any contract.
Are you currently in the process of buying a property? If so, you may be coming up against a heap of jargon and official-sounding terms that make no sense to you. Like all legal acquisitions, property contracts can have a hefty amount of fine print that the average person doesn’t want to bother reading. However, a house costs a tremendous amount of money and any purchaser should understand all the finer details of their potential property. In this case, it is likely to be worth doing the research.
What is a property title?
A Community Title, Torrens Title and Strata Title all fall under the property title umbrella. A property title is a collection of rights and regulations tied to a property. A title outlines all of the legal information about a lot, including who owns it, existing easements, or other details about the land. Titles are updated when a property is sold to reflect the new owner. Sometimes, there are restrictions on titles that cannot be altered (at least, without lengthy court applications). Your real estate officer or the seller of the home may not always be the most knowledgeable about the finer details of the property title. You need to contact property conveyancing Brisbane and get expert advice.
When buying, it’s essential to engage a professional conveyancer early on in the process. They’ll run the searches for any existing titles on the property you intend to purchase and let you know if there are any issues. If you’re looking for a home in Brisbane or Melbourne, Jim’s Property Conveyancing has a team of experienced professionals who can assist you with this process.
A Torrens Title
A Torrens Title is seen as Australia’s highest form of property title. A Torrens Title names you as the sole owner of the property – or joint owner, if you buy with a spouse, sibling or friend. Having the Torrens Title under your name means that you are the correct owner, across all and any circumstances. It’s also the most common form of property title in Australia. With a Torrens Title, you have complete control over all renovations and property changes you make to your house – provided they fit in your local council’s building guidelines. You can decorate your outdoor area the way you’d like it, and you typically have a yard to yourself. You are also liable for all repair or maintenance costs associated with your property.
A Strata Title
A Strata Title is usually used for apartment buildings, units, housing developments or retirement villages with shared areas. This could include driveways, laundry facilities, outdoor entertaining areas, pools, gyms, gardens, and so forth. No individual owner in the apartment block or development has a greater claim to any of these shared areas than another person. No one person owns the land itself that the houses or units are built on. Everyone does have ownership of their respective abode, although there are sometimes restrictions on what you can and can’t do with the property. By-laws may apply for the property, such as a ‘no pets’ rule.
The land itself is owned or managed by a company that all individual units or homeowners are a part of as well. Any major decisions for the land, for example, the building of a new shared tennis court, have to be made by all company members. The company is usually referred to as the ‘owners corporation’. As well as mortgage and rates, people living in this sort of home also pay quarterly strata fees – sometimes colloquially referred to as body corporation fees in some states. These funds go towards repairing and maintaining the shared spaces. Certain people will pay more in fees than others, such as a penthouse owner paying more than someone in the basement apartment. Strata fees also increase over time.
When living under a strata title, the homeowner may need to seek permission from the owners corporation before undergoing any property development or significant renovations. With shared outside spaces, you may not be allowed to do things like hang additional washing lines, move in a BBQ or similar restrictions.
A Community Title
A Community Title falls somewhere in the middle between the previous two titles. While strata encompass a multitude of apartments, units or townhouses with shared land and areas, community titles can be held by as little as two houses that share a common area. This could be a driveway, a detached garage, or a backyard. A Community Title is a subdivision of multiple homeowners holding Torrens Title that allow them to share a particular area. Note, this is not to be confused with an easement that allows one property owner access to another person’s land for the purpose of accessing their meter box or sewerage pipes or another essential service. An easement is one person having permission to go onto someone else’s property, whereas a Community Title refers to shared land areas.
Community Titles and Strata Titles can have a lot of similarities, which sometimes causes confusion between comparing the two. There are a few key differences, though. Strata Title owners are usually only the sole owners of their building – while Community Titleholders typically own the entirety of their property’s land within the boundaries. While Strata tends to be apartments and units, a Community Title owner usually lives in a gated estate or another similarly set-up property with shared areas. Community Title owner also has to pay quarterly or annual fees to help pay for maintenance and repairs on the shared spaces.
Similar also to a Strata Title, there may be restrictions on what a Community Title can do with their property. However, these are usually far more relaxed and lenient than a Strata Title equivalent.
Which type of title is right for me?
There are positives and negatives to all three types of titles. Strata Title’s by-laws could feel restricting to some – however, you also get daily access to pools and gyms, which are expensive amenities. Having a Torrens Title means you get complete independence with your property and your choices with it, but it also means that you are solely responsible for the maintenance costs. Buying a property in a complex with a Community Title is typically cheaper than a stand-alone house. Saying that you have to take into consideration that you’ll be paying community levies for the rest of your life – even after you finish paying off your mortgage!
There is no best or worst type of title to hold, and it will ultimately boil down to your financial situation, location expectations and what you want to get out of a home. The most important part is to fully understand the regulations, fees and benefits of any title you may be buying into before you go through with the purchase. Make sure you have a trustworthy property conveyancer working with you while you are purchasing a property. They’ll be able to break down the intricacies of individual titles for any properties that you are interested in, and what the title will entail for you as a homeowner. As with all things to do with property, asking as many questions as possible and doing prior research is going to make sure you’re happy with your final purchase and no nasty surprises are waiting.
Visit Jim’s Property Conveyancing or phone 13 15 46 for more information about property titles or real estate conveyancing services. You need to contact property conveyancing Melbourne and get expert advice.