Ways to Own Property
Apart from Crown leases, titles to real estate in Tasmania are either under the old system (known as general law) or the Torrens Title system. Nearly all general law land has now been converted to the Torrens Title. The Torrens Title System was intended to simplify title, so that one document contained all information about a property. It has largely succeeded.
Old System – General Law Title
General Law title was introduced into the colony of Tasmania when it was first settled, and has its roots in English land law. After the original Crown grant of land, title to property was transferred to each successive owner by a deed of conveyance or mortgage. Each document had to be properly signed and attested, stamped and contain a description of the land. All these documents formed the ‘chain of title’. If one document was invalid, all those which came after it probably were too. A general law title is considered to be only as strong as the weakest document in the chain of title. For example an a general law title containing a deed where a signature wass forged or unattested would break the chain of ‘good title’.
As a result of the complexity of searching general law title and how far back it must be traced, the law now provides that one must only search back 20 years for ‘good title’ provided there is, to begin with, a good title that is at least 20 years old. In practice, to find a good starting title often means going back well beyond 20 years. General law conveyancing is generally complex, time consuming and expensive. Most titles in Tasmania are now under what is known as ‘the Torrens’ system.
If you are purchasing real estate that is under general law title, the general law title will ultimately now be converted automatically to Torrens title once it has transferred to a new owner or had a new dealing registered. The Land Titles Office handle this process on lodgement of required documents. The Land Titles Act 1980 (Tas) provides for the compulsory conversion of general law title to Torrens title on the lodgement for registration under the Registration of Deeds Act 1935 (Tas) of a conveyance on sale (i.e. you are buying a property with general law title), or a legal mortgage (i.e. the owner of the general law title property takes out a mortgage and the lender registers its mortgage against the title). This means that general law ‘old system’ title is being eliminated through transactions regarding the property or through a process whereby the property can be voluntarily converted to Torrens title.
To know if you are looking at a general law title you would ordinarily expect it to have a registered deed number and accompanied by a series of past transactions. It will have a map also showing surrounding properties that may have been subdivided together and have an accompanying description that may go something like:
‘ALL that piece of land situate in the City of Hobart in Tasmania (being portion of Twenty eight perches and eight tenths of a perch of land conveyed by one Mary Crane to Joseph Ebenezer Merkby by an Indenture dated the Sixth day of December One Thousand Eight Hundred and Eighty Eight and registered number 8/1649 and bounded as follows...’
‘Torrens title land’ is land under the Land Titles Act 1980 (Tas). Torrens title searching and conveyancing is far simpler than that under the general law system. Electronic searches can be undertaken on the Land Titles Office records known as the LIST.
In most cases you should be able to obtain a copy of the search of the title and associated plan and copies of any registered dealings on the title such as registered easements.
The Torrens title will have a Volume and Folio number under the Certificate of Title in the top right hand corner of the page. It will contain a ‘Description of Land’, the name of the registered proprietor in its ‘First Schedule’ and details of registered mortgages and other dealings such as Schedules of Easements or caveats its ‘Second Schedule’. There is a plan of the property with the Certificate of Title.
The Certificate of Title should be kept in a secure place for safe keeping. (If there is a mortgage registered against the title to the property the mortgagee will usually hold the original Title until the mortgage is discharged)
Owning a Property with Someone Else
In Tasmania there are 2 ways to own property with another person or entity – join tenants or tenants in common. If you are purchasing a property with another person you should consider whether a joint tenancy arrangement or tenancy in common is more appropriate.
Joint tenants, although they have a joint interest in the property, cannot identify a definable proportion of the property as their interest in the same. Joint tenants cannot individually mortgage their share of the land, but rather must act collectively in relation to any dealings with it. Upon the death of a joint tenant that person's interest in the property is automatically transferred to other joint tenant(s). If there are more than two joint tenants, for example four, then the death of one will see their share go in equal portions to the surviving joint tenants, until the last joint tenant is left with the whole of the property. This is what will happen by operation of law, regardless of whether or not the deceased owner makes a Will and indicates they want something different to happen. Joint tenants are often a preferred structure for couples particularly in the case of the family home.
A joint tenancy can be converted into a tenancy in common (explained below) by an application for severance under section 63 of the Land Titles Act 1980 (Tas).
Tenancy in Common
Tenancy in common means that where two or more persons have either equal or disproportionate shares in the property. This may be desirable where there are different contributions to be made to the purchase and upkeep of the property. Each tenant in common has the use and occupation of the property and may deal with their definable interest by way of mortgage, etc without the consent of the other. To deal with the property as a whole, however, the consent of all tenants in common is necessary. On the death of a tenant in common the land passes to that person's beneficiaries under their Will or intestacy.
Where strangers or business associates purchase real estate together a joint tenancy structure may be unsuitable particularly if contributions to the purchase of the property are unequal.