What’s a “Toxic Title”?

October 10, 2018

What’s a “Toxic Title”?

When looking for a property to buy, whether as a home or investment, we often want the opportunity to improve it through renovations or changes. Of course, what you can do is often restricted by things like council regulations, easements, caveats and covenants.

When these restrictions are so extensive that you can’t do anything to improve or change the property, it can be referred to as a “toxic” title. These are the classic dud properties, more costly than they’re worth and restricting land use and development. Sometimes, toxic titles are difficult to uncover without the right professional help to investigate the title.

Council Restrictions

Australia is notorious for extensive regulations imposed by local councils. Many of these regulations greatly restrict how you can use your property. These rules change from council to council, and some of them can be quite obscure. Restrictions can involve (but are not limited to):

  • Heritage listing
  • Fencing
  • Trees
  • Plant species
  • Land usage
  • Type of signage
  • Swimming pools
  • Building materials
  • Structures such as sheds
  • Waste removal and disposal
  • Noise such as machinery or even vacuum cleaners
  • Atmospheric particulates such as from wood burners

There are various tales of new property owners getting a shock from council restrictions. For example, many people find out they can’t build sheds, bungalows, pet enclosures, or pools due to easements such as water piping beneath the property. An example of the more obscure is when Wagga City Council took action against homeowners for painting their house purple as it conflicted with the conservation status of the area.

Encumbrances

Encumbrances refer to a range of restrictions that can be placed on the land title, from easements that allow water, gas and sewage to flow through the property to restrictions on how the property can be developed. For example, an easement might restrict renovations that increase the floor size or height of a property, to stop you blocking the neighbour’s view or changing the “character” of the neighbourhood.

Other encumbrances include caveats — in which another party still holds a claim on the property through a mortgage or other loan — and covenants, which also involve restrictions on development. For example, properties built as part of a wide-scale development may have restrictions placed on how they can be changed to ensure there’s a level of uniformity.

Get in Touch With a Conveyancer in Melbourne

The only way to ensure you can find every one of these restrictions on a property title before you make a purchasing decision is to get in touch with an experienced conveyancer, who can investigate the title thoroughly and ensure you understand what you can and can’t do.

Dealing with properties, whether buying or selling, can be complicated and time consuming, even for experienced investors. From preparing legal documents and overseeing the negotiation and settlement processes, if you need quality, reliable conveyancing services in Melbourne, talk to the experienced team at Just Conveyancing.

Call us today on (03) 8580 2276 or contact us online.

 

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