Whilst Old System Title has all but disappeared (thankfully) from NSW over the past few decades, every now and then we see a title search noting that it is “Limited Title”. So what does this mean? And is there cause for concern when undertaking conveyancing in NSW?
We often see this in old inner city suburbs or other areas where properties were created in the early to mid 1900s. Whilst not fatal to buying the property, there are a few extra steps and considerations for prospective purchasers.
In short, a limited title property means that the land has not been fully defined by a survey and the boundaries have not been examined in Land and Property Information (LPI). A limitation can be subsequently removed by the lodgement of a plan of survey which satisfactorily defines the boundaries of the parcel.
A number of issues can arise if you are considering buying a limited title of which you need to be aware. Firstly, if you are borrowing money to complete the purchase, the majority of banks require a survey report to be submitted as part of their lending criteria. Secondly, an abstract of title usually exists for these properties in lieu of a survey report. Many banks do not accept this and insist on a survey report being completed. However, because these abstracts are often misplaced over the course of time, many contracts for limited title properties contain a special condition removing the requirement that the vendor must produce the abstract of title. This can be a headache for purchasers who need to settle quickly and puts them back in the territory of having to satisfy their bank by obtaining a survey report.
The main message with limited title properties is to keep in mind that extra expenses and additional work is likely to be involved to satisfy your lender. So when you fall in love with that gorgeous inner city pad, it might take you a few extra hurdles to secure it. Also, if you want the limitation removed at some time in the future, the only means of doing so is by lodging at LPI a plan of survey which defines the properties boundaries.
If you’ve come across a property which is on limited title please call us, we’ve helped many people in the past navigate this area of conveyancing.
John Kettle – Solicitor Director – ClickLaw