• The term ‘estate’ refers to the set of rights associated with enjoyment of land and an individual's right of possession of land.
• Under Australian property law three types of estate exist:
• fee simple estates;
• life estates; and
• leasehold estates.

• A fee simple estate is the greatest estate in land.
• In Australia it is almost equivalent to absolute ownership. 
• Legally no person other than the Crown can hold absolute ownership in land and therefore land owners pay annual land tax to the Crown (Commonwealth Government) for their right to own the property.

• A life estate gives the ‘owner’ of land full proprietary rights for the duration of their life. 
• The owner cannot dispose of the estate or pass the estate under their will.

• A leasehold estate provides a lesser interest in land than a freehold estate. 
• A leaseholder has the right to use the property for the purposes specified in the lease usually in exchange for regular payment (rent).
• Such an estate has a definitive duration for example a period of two years. 

• A covenant is a restriction on the use of land. 
• A covenant can be positive requiring the doing of an act or a covenant may be negative in the sense of requiring someone not to do a particular act.

• Freehold covenants are agreements made by owners of fee simple estates dealing with the use or development of the land. For example a land developer may build an estate and everyone who lives in the area must comply with the freehold covenants such as building brick houses or houses of a certain size.

• A covenanter is a person whose land is burdened by the covenant and who is therefore obliged to follow it.
• A covenantee is a person whose land is benefited by the covenant and has the right to enforce it. 
• A covenantee has the right to sue the covenanter if there is a breach or failure to observe the covenant. 

• Under the Conveyancing Act 1919 (NSW) a prescribed authority may be either:
• the Crown (state, territory or Commonwealth);
• a public or local authority; or
• a corporation prescribed for the purpose of a section of the Conveyancing Act 1919.
• You need to check the relevant legislation in your state or territory as the rules are different in each jurisdiction.

• This legal rule states that one cannot give what he or she does not have. 
• Under property law principles it means that a seller cannot sell property that does not legally belong to them. If a person attempts to do so the purchaser will not obtain any ownership rights.

• ‘Bona fide purchaser for value without notice' is a term used in property law to refer to a person who purchases property without being notified of any other individual’s interest in that property other than interests listed on the register.

• A 'profit a prendre' is a registered right to take natural product grown on land owned by another person.

• A caveat is lodged by a person holding an unregistered interest in property. For example:
• the holder of an equitable estate under a trust;
• an equitable mortgagee; or
• the person claiming to have an easement over the property.
• A caveator should have sufficient evidence to support the factual basis of the claimed interest.
• A registered proprietor of property over which an individual holds a caveat may apply to the Registrar to remove the caveat. The Registrar will require the caveator to show cause why the caveat should not be removed. If a caveat is lodged without reasonable cause the caveator may be liable to pay compensation to any person who sustained loss.

• Postponing conduct is conduct or inaction that deprives the holder of an earlier equitable interest of having priority over another person with an equivalent interest. 
• Examples of postponing conduct include fraud and gross negligence. 

• A person who owns the goods but gives them to another individual for some purpose while retaining the rights to possession and transfer is called a bailor.
• A person who receives goods for a specific purpose but does not obtain ownership is a bailee.

• The Personal Property Securities Register (PPS register) is a register that lists any security interests registered against personal property.
• Use of the PPS register is voluntary. It can be accessed electronically at www.ppsr.gov.au. 
• Consumers who are about to purchase valuable personal property such as a car, boat or rare jewellery should search the register to ensure that the personal property is free of any security interest as it is not uncommon for the original owner to have taken out a loan against valuable personal property.

Question

My neighbour recently sold their property. Their property is subject to a restrictive covenant saying that they can't build a dam right on our boundary fence line as it could overflow and cause damage to our property which is lower lying than theirs. Can I enforce the covenant against the new owners? 

Answer 

• The principles of equity will allow you to enforce a restrictive covenant against your new neighbours provided that when they took title to the property they were given notice that the covenant existed. However the laws regulating conveyancing also require that any restrictive covenants must be listed on the register. 
• To be enforceable the covenant must:

1. be negative in nature;
2. be for the protection of the land retained by the covenantee; and
3. have been intended to run with the covenanter’s land.

• If the covenant was created to benefit you personally rather than your land then it may not be enforceable against the new owners. In the circumstances you have mentioned the covenant exists for the protection of your land rather than you personally so it should be enforceable. 
• You should speak with your neighbour first before pursuing any legal action. They may be more than happy to cooperate with you and abide by the covenant. If there is any indication that your new neighbours are unwilling to cooperate you might need to contact a lawyer to evaluate the specifics of your situation and advise whether the covenant is still enforceable and if so how to ensure it is complied with. 

Question

I'm new to Australia and I don't really understand how the Torrens system works. I've dealt with deeds before, but not this system of title by registration. Why is this different to some other countries? Why doesn't Australia use deeds?

Answer 

The Torrens system was primarily introduced in Australia to remove the need for a chain of title deeds to prove an individual’s ownership rights to a parcel of land. The deeds system can be impractical, costly, uncertain and is somewhat outdated given the advantages that technology has provided.

• Some of the most frequently cited benefits of the Torrens system include the following. 
• The fact that it encourages landowners to register their interests in land thus creating a more complete and comprehensive understanding of land ownership across Australia. Title to a property depends on compulsory registration with the governments land registration system. In New South Wales this is Land and Property Information (LPI). The state government guarantees that the certificate of title discloses all registered interests in a property.
• Retrospective investigation into the chain of title is no longer required. This saves costs of lengthy investigations and limits to a large extent the scope of the nemo dat quod non habet rule. This legal rule states that one cannot give what he or she does not have. If a purchaser makes even minimal inquiries into the register before buying they will not be at risk of paying for property that the seller doesn't have the right to sell. This is an advantage compared to the historical system where buyers had to satisfy themselves that there was an unbroken chain of valid title from the time of the first land grant to the present.
• Categories of ownership are clear and interests in land are generally easy to transfer.
• As most interests are registered priority disputes are easily resolved. For example interests registered earlier in time are given priority.
• The register is publicly available for a small fee.

Question

I recently purchased a block of land in the country that seemed like a really cheap deal. I organised the title documents and met with who I thought was the registered proprietor to sign the transfer of title. I then took into the titles office to register. I've since had a phone call from the real registered proprietor's son who informs me that his father recently passed away, that he would never have sold the land for that price and that his brother must have forged the signature. I'm not sure whether the correct person signed or not and there might be no way to tell. What should I do?

Answer 

• You should always seek legal advice from a specialist property lawyer if you suspect that fraud has taken place.
• In normal circumstances if there were no fraud the principles of indefeasibility would apply.
• However there are exceptions to the indefeasibility principles with the most common one being fraud. In this situation it is essential that you contact a lawyer who can attempt to protect your interests. 
• An experienced property lawyer can assist you in determining whether fraud has taken place and whether you have any right to the property. 

Question

I've just purchased a recently subdivided block of land. The original owners subdivided their block of land and then sold the new parcel to me. The original owner agreed to sell the new parcel to me on the proviso that I agree not to build a house that is over two storeys high because it will obstruct his view and create too much shade over his backyard, which will affect its value. It's now six months later and he has sold his house. I have new neighbours. Do I still have to comply with the covenant? 

Answer 

• This will depend on the particular covenant and its wording and intention.
• Under general legal principles the person entitled to benefit from a covenant (your neighbour) may choose to release it by deed or in writing. A covenant released in this manner is upheld under equitable principles of property law.
• Under the Torrens system a person entitled to a benefit from a covenant may release it by registering a deed of release with Land and Property Information (LPI).
• Covenants are generally removed or ‘released’ if they no longer hold any practical utility that benefits the land.
• A covenant is considered to have been impliedly released if:
• there has been long inconsistent course of use;
• the person benefiting from the covenant has repeatedly disregarded breaches; or
• the character of the neighbourhood has changed so much that the covenant has become redundant or obsolete.
• You may ask your new neighbours for a release from the covenant. 
• Alternatively your neighbours may wish to continue to enforce the covenant. Whether they can do so will in part depend on whether the covenant has been registered or not. 
• It will also depend on whether the covenant was created to personally benefit the original owner or whether it was intended to remain on the land regardless of who owned it.

Question

I am a tenant of a commercial property that was recently sold to new landlords. The lease is unregistered but it contains an option to renew at the end of the lease term. Prior to purchasing the new owner knew about the lease and its terms. I have continued to pay rent to the new registered proprietor but now have been denied the right to exercise my option to renew. I have learned that when I move out they plan to put a new tenant in and register the new lease. Can they do this? 

Answer 

• The courts have previously decided that unless there is dishonesty the use of registration to defeat an unregistered interest will not amount to fraud. 
• Under section 43 of the Real Property Act 1990 (NSW) notice of an earlier unregistered interest is taken to be outside the definition of fraud. In your case even if the new registered proprietor knew about the lease and its terms they cannot be punished by law for exercising their right to register an interest that is inconsistent with your unregistered interest. 
• It may be different if the registered proprietor had acted dishonestly or made fraudulent representations to induce the original owner to sell the property. For example if the registered proprietor assured the previous owner and you that your interest would be protected and then registered an inconsistent interest for the purpose of seeking indefeasibility they may be seen as acting fraudulently. 
• One possibility may be for you to seek to register your lease before it expires. This must be done before the lease term runs out because the LPI will not accept lodgement of an expired lease in any circumstances. Depending on the terms of your lease you may need to pay stamp duty and other charges.
• If you are concerned that there has been dishonesty on the part of your landlord or want to know more about your options regarding your tenancy you should see a lawyer. 

Question

I am subdividing my land and intend to sell the new parcel but I still need access to one part of the land to use as a driveway. I think I need to have an easement over that part of the land. How can I ensure that an easement will allow me to do this?

Answer 

• If the rights you seek to obtain are expressed in terms too wide or vague in character they may not be enforceable under the easement. For example if you said you wanted 'the right to wander at will over another person’s property' this would be too wide or vague to be a valid easement. 
• If the rights you want would amount to rights of joint occupation or would substantially deprive one owner of proprietorship the easement will not be enforceable. An easement cannot substantially interfere with an owner’s right to exclusive use and enjoyment of their property.
• It must also be considered whether the rights contained in the easement constitute mere rights of recreation rather than any quality, utility or benefit. For example you would have difficulty enforcing an easement that allowed your kids to ride their bikes on a track that crossed into your new neighbour’s land.
• An easement that will allow you to use part of the land for a driveway will usually not be a problem. 
• An alternative may be to change the shape of the subdivision to create a battleaxe block so the driveway remained in your possession.
• If you decide to rely on an easement you should seek the services of a lawyer to ensure that the easement is drafted correctly and that the new purchaser is aware of its existence. As you will be subdividing your land you will probably already need to work with a lawyer to draw up the new titles. An experienced property lawyer can assist you with this and answer any questions you may have regarding easements.

Question

There is a caveat over my land and I want to have it removed before I sell. It's a caveat that is no longer relevant and I just need to get rid of it. Can I do this myself?

Answer 

• A caveat may be removed in a number of ways.
• It can be removed through lodgement of a Withdrawal of Caveat form at Land and Property Information (LPI). The form must be signed by the caveator (the person who benefits from the caveat) or their solicitor.
• A caveat can lapse. A person whose land is affected by the caveat may lodge an Application for Preparation of Lapsing Notice at LPI along with the lodgement fee. A notice is served on the caveator and the caveat lapses (runs out) 21 days after service of that Notice unless the caveator initiates further action extending the duration of the caveat.
• An order of court can also remove a caveat from the title.

Question

I loaned my son and daughter-in-law a lot of money at the start of their marriage to buy a house. They signed some papers saying that I would be paid back and giving me an interest in the property as security. They have made some payments but they have been raising a young family so I have not pushed them for more money. However now it looks like their marriage may be breaking up. I still want to be repaid the money they owe me but I don’t want to upset my son. Do I need to lodge a caveat over their property?

Answer 

• The holder of an unregistered interest over a property has no legal duty to lodge a caveat but there may be many good reasons for doing so.
• Under general legal principles where there are multiple competing equitable interests in a property the earlier in time has priority unless there has been some postponing conduct.
• In other words if someone with a similar interest to you comes along and lodges a caveat before you get around to it such as another mortgagee this may defeat your interest. This situation is designed to encourage people to register their interests formally for the sake of certainty. 
• Courts have stated that if a priority dispute arises failure to caveat may amount to postponing conduct. Whether the courts will find your conduct to be postponing conduct depends on the circumstances of your case. For example it is likely that postponing conduct will have occurred if a person holding a prior unregistered equitable interest in a property does not declare it through lodging a caveat and a later interest in property is created by another person based on the assumption that there are no prior interests.
• This means that if you do not register your interest and the property is mortgaged or sold you may lose the interest that you hold in that property as security for your loan.
• If you lodge a caveat you will also be protected by the fact that a later unregistered interest holder cannot prevail over an earlier interest holder where they had notice of the earlier interest at the time of acquiring the later interest. 

Question

I am a co-owner of a property with my friend. I do not live in the property whereas my friend does. Can I seek compensation from my friend or force him to pay rent?

Answer 

• Each co-owner has the right to possess and enjoy the land as a whole
• A co-owner who elects not to exercise his or her right of possession is not entitled to claim compensation from the occupying co-owner.
• You cannot charge your friend an occupation fee or seek compensation unless:
• your friend has ousted you from the property:
• this means your friend is preventing you from exercising your right to possession of the property;
• note however that merely telling a co-owner to ‘get out’ does not constitute an ouster even if the person leaves; or
• there is an agreement between you and your friend that he will pay an occupation fee or rent.