If you own or are looking to buy a unit or flat in South Australia, it is good advice to beware Moiety Titles.
In my work as a conveyancer, I concur with that advice on two grounds:
- They are an archaic form of land title requiring increased administration
- Banks do not like lending against them which means properties are harder to sell
The pre-community or Torrens title options
Up until 1967, the two most commonly used titles for flats (or units) in South Australia were the:
- Moiety Title (lease based)
- Company Title (share based)
As the owner of a flat or unit under a Moiety Title, you would be registered as the owner of a share of the land the unit block sits and would be effectively ‘leasing’ your right to occupy your flat(s) from the other owners, as well as leasing your right to use common areas.
As the owner of a flat or unit under a Company Title, your share certificate registers you as the sole owner of the land your flat sits on, also giving you the right to use common areas. When you sell, the ownership is transferred to your buyer.
What to do when dealing with a Moiety Title
If you ever consider buying a Moiety title property, be very careful and be informed before signing a Contract.
It will be invaluable for you to understand the differences between a Moiety Title and the more common, Torrens, Strata or Community Titles.
It’s also worth noting that many banks don’t like lending against Moiety Titles, or at least only lend a reduced percentage.
This is where an established relationship with a conveyancer can be priceless.
Likewise, owners of Moiety Title property would do well to discuss their situation with their conveyancer because you have options for converting to a Community title property.
While there is an approval process with costs that can be substantial, the payoff is a property that’s more saleable.
The important thing to take away from this article is that being fully aware of the pros and cons of your property title type and having access to a trusted advisor such as your conveyancer, can save you from heartache and hidden costs with your flat or unit investments.