If you’re in the market to buy a house, you may be advised that a property you intend to purchase is ‘Limited Title’. So, what does this mean? And is a Limited Title something that you should be concerned about?
In a nutshell, a Limited Title property refers to property that does not have a defined location or clear boundaries verified by the Land Registry. Limited Title properties are common in older city suburbs of Sydney and rural New South Whales and are no cause for major concern.
Limited Title Property in NSW
Within properties and areas established in the early to mid-1900s, ‘Limited Title’ properties are relatively common. Tens of thousands of properties in NSW, especially in older suburbs, are designated by the Land Registry Services (LRS) office as having ‘Limited Title’. This can needlessly worry a purchaser. All it means is that the boundaries of the property have not yet been surveyed precisely. This can be easily fixed if necessary.
Removing Limited Title
The designation of ‘Limited Title’ can be removed by a registered surveyor registering an accurate survey of the land (called a plan of delimitation) with the LRS. A plan of delimitation requires the surveyor to re-establish the original deed boundaries and to compare those boundaries with existing occupations (including buildings constructed) on the land.
This type of plan is more expensive than a standard surveyor’s plan of the land, and there are some LRS registration costs. Total costs are usually a few thousand dollars.
What If I Want to Purchase Limited Title Property?
Before purchasing a ‘Limited Title’ property, it is prudent to have a survey plan done to confirm there are very likely to be no boundary encroachments.
It is also prudent to take out title insurance, which is a low-cost way of protecting yourself if it turns out that the boundaries as understood at the time of purchase are significantly off-line.
If you are not planning on developing the land, it is likely that the Limited Title designation will have no impact.
If you want to subdivide ‘Limited Title’ land, you may be required to register a plan of delimitation with LRS, although that is not always the case.
Can I Get a Home Loan for a Limited Title Property?
Yes – it will still be possible to gain approval for a home loan for a property with a Limited Title. However, some banks and lenders in Australia will be reluctant to lend for these types of properties without the property being surveyed. While Limited Title has very little impact on a property in 2022, many Australian banks are still cautious about lending as there could potentially be a misdescription on the boundaries or easements. For this reason, some lenders will refuse Limited Title properties or lend at reduced leverage ratios.
If you are considering purchasing a property with a Limited Title, it’s best to have the limitation removed by working with a conveyancer or solicitor who will submit a plan of survey, defining the land’s boundaries.