Long Land Titles
In almost any state in Australia, it’s rare to be able to buy a block that’s ready to build on straight away. So what happens next, how do you keep your clients informed and what’s the process of land titles? We’ve put together some clear-cut answers to the most frequently asked land title questions to help guide you and your clients through the process, we have used Victoria as our reference point and each state has slightly different terminology however the process is pretty similar.
1. WHY IS THE LAND NOT READY?
Most investors want to start building straight away but when you’re buying off-the-plan, the key is to communicate that the client is buying land that is not yet fully developed. The developers are always aiming to build each stage as quickly as possible. Once the stage your clients land resides in is complete and your block is ready, the developer will let you know and when your block is reaching the point of registering this is your opportunity to guide your clients through the settlement process. A benefit of this waiting period is that it often gives your clients time to see a bit of growth in the value of their land. They're also not paying interest on the land loan but still gaining capital growth (hopefully)!
2. WHY DEVELOPERS CAN'T GIVE AN EXACT DATE FOR TITLES?
There are many factors outside of developers control, such as weather, unforeseen matters, installation of services and Council approvals – all of which can play a part in the process. Instead, by keeping in constant contact with your developer, you can provide a realistic timeframe for your client’s land titles and keep them informed in the lead-up.
3. WHEN WILL IT REGISTER?
Once all land works are done, the developer will need to submit documentation to the relevant Council for approval and obtain sign-off from all authorities - water, power, NBN/broadband, and so forth. They typically allow 4-6 weeks for this, following works being completed. Once everything is approved, they can lodge at the Land Titles Office (LTO).
4. CAN YOUR CLIENTS ACCESS IT?
No. Legally, the land is not theirs until settlement has occurred, and the developer often can’t allow access for safety reasons. It can also can be a bit confusing for a buyer to try and view their block prior to completion, there is often a lot of major earth works going on which rarely looks nice and can make finding the exact plot of land very challenging. It is best for your client’s to just wait.
5. WHAT IS A STATEMENT OF COMPLIANCE?
Statement of Compliance (SOC) simply means the developer has sign-off from all authorities that the services and assets throughout the stage are where they should be – again, these would include water, power, broadband, and so on. Issued by the Council, the SOC is their evidence that all requirements have been satisfied. This must be included with all documentation being lodged at the Land Titles Office, in the next step of the process.
6. WHAT HAPPENS ON SETTLEMENT DATE?
After receiving your client’s titles, settlement is the day their land ‘officially’ becomes theirs. Usually attended by legal representatives on both the developer of your client’s behalf (should they choose to hire a conveyancer or solicitor) and their lender, settlement is when they'll pay the balance of their purchase price. Their conveyancer or solicitor will also verify the registration of all their title documents so that the land title shows the change of land ownership. Once that’s done, it’s time to begin construction!
My next article is going to be on the challenges associated with long title dates, ie 12 months or more.
Reach out to me if there is a, buying or selling off the plan topic you would like to know more about.
Meesh Hall
Project Sales Advisor - Investorist
Phone: 0413 681 174 | Email: meesh.hall@investorist.com
Website: www.investorist.com
