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Torrens Title is based on the notion of ‘ownership by registration’. You register your ownership of land with NSW Land Registry Services (LRS). Basically, if you have properly registered yourself as the owner of land, then you are the owner despite all other claims and that ownership is indefeasible.
Before Torrens Title was introduced landowners would have to show a ‘good root of title’ (supply proof of their ownership to the land), by showing the history of the ownership back many generations. This is now called ‘old system title’.
If you own something in Torrens Title, it means that you own the land and the building on the land, to the exclusion of all others who are not registered on title. Torrens title is the most common form of land ownership in NSW.
Interesting fact: Torrens Title is named after its creator, Sir Robert Richard Torrens, who was the third Premier of South Australia. The Torrens Title system was original to Australia (though that is subject to some debate) and was adopted in other countries including Canada, Ireland, Israel and a small number of States within the United States of America.
Strata
Strata Title is ideal for ownership of larger, multi-level buildings, where ownership of each unit is separate, but no unit owner owns the physical building which comprises the units, or the land on which the building sits.
The building itself and the land is referred to as ‘common property’ and includes things such as entrance ways, hallways, swimming pools, tennis courts, driveways, lifts and so on. No single unit owner will own any of these areas. All the unit owner owns is the space inside each unit. Perhaps the paint on the walls, but that’s pretty much it.
The way common property is managed is through the creation of a company, to which all of the owners of the individual units become members. All members of this ‘Owners Corporation’ have a right to participate in the decision making of the company. The Owners Corporation is created as soon as the strata plan of subdivision is registered with LRS.
The Owners Corporation is responsible for maintaining and repairing common property, taking out relevant insurances, managing the company’s finances, keeping records and administering the by-laws (e.g. no pets).
The Owners Corporation is financed by the levies that are raised against each of the units. Levies are usually paid every 3 months. The levies that a particular unit owner will need to pay will be determined by the ‘unit entitlement’ attributed to that unit.
When the developer of the strata development first registers the strata plan of subdivision, he or she gives the entire building an ‘aggregate unit entitlement’ (e.g. 100 units). A share of the unit aggregate is then attributed to each unit based on their individual value, which involves a consideration of unit size, location, aspect, rules attributable to the unit and so on. In most cases, the allocation of unit entitlements will need to be carried out by a qualified valuer.
The higher the unit allocation for a particular unit, the more that unit owner must pay in levies to the Owners Corporation. The unit allocation can also affect voting rights, so it is important that the allocation is done properly and fairly.
Community
Community Title can be crudely described as a mix of Torrens and Strata. It is a type of subdivision that allows for shared property to be created within an otherwise regular Torrens Title ownership.
Lets use a gated estate as an example. Within the estate there are 10 houses, each separated by boundaries and each owned by different people. The owner of each house will own all of the building and all of the land on which the building is situated.
At the centre of the estate is a large water feature, a tennis court and parking area. To enter the estate, you need to pass by an electric gate, which is monitored by a security company.
In this example, each owner still owns their individual house and land, but they all share common amenities, including the security system, the entrance gate, tennis court, fountain and parking area.
A set of community by-laws would affect how each landowner can use or not use their land, similar to the way strata by-laws operate.
Each owner will be responsible for contributing to a joint fund, from which payments are made for the maintenance and repair to common property.
Questions?
If you have any questions regarding the different ways in which ownership can operate, or if you have any concerns with the way your rights might be affected, contact us and we can help you.
If you’re interested in reading more about your property rights, you might be interested to read our article on a council’s right to enter onto your land, or important facts regarding building defects.
Lorri is a director of PDC Law. Lorri combines excellent technical expertise with a common-sense approach to best represent her clients. She is one of few Accredited Specialists in Commercial Litigation in the Illawarra and Shoalhaven. This accreditation is testament to Lorri’s expert knowledge and skill in dealing with commercial disputes. In 2019 Lorri was awarded Regional Lawyer of the Year by Women Lawyers Achievement Awards.
