Hi All,
I'm new around here and would really like your opinions on the following scenario!
I have found my ideal house in my desired area…..but it's on a moiety title. I figure I could buy the place (the bank said yes!) then convert it to a torrens title later but am I being naive in thinking that it's an easy process?
I know that I would need to get the other title holder's consent but why wouldn't they go for it? It will increase the value of their property so why would they say no?
The house is priced at about $80K below market average. I've attributed this to the fact that it's moiety title, needs work and is currently tennanted, but figure if I spend around $40K renovating and say $10K – $15K on legals, I'd still be in front.
I've always believed that if something is too good to be true then it usually is…..but……!
Thanks in advance!!!
I'm sure many have not heard of "moiety title" before – can you explain? Which state are you in?
Info about Moiety Titles (thanks for bringing it up Flyingsolo – I've never heard of it before).
From the Law Handbook (South Australia) – revised January 2009:
"Finance institutions sometimes do not offer loans for properties offering moiety titles as security. A moiety title, typically covering maisonettes or attached cottages, means that the person owns a share of the whole of the land and leases a defined portion of the land for himself or herself from the other owner or owners."Hi Scott no Mates, I'm in South Australia, and thanks Singer for your input!
Apparenlty, Moiety titles dates back to merry old England and was the title before Torrens Titles were introduced. Effectively, it's one parcel of land with two dwellings on it (typically maisonettes) whereby each owner of the dwelling is joint owner of the land. For this reason, banks don't like lending on Moiety titles (because the only definable sole ownership is that of bricks and mortar), and if they do they will generally only lend on a lower percentage. (My bank will only lend on 70%)
This is also the reason why the property I'm looking at is below the market average. I would imagine that First Home Buyers would generally be excluded unless they have a substantial deposit and property investors wouldn't want the hassle. Me? I'm looking to perhaps move into it in a year or two after I sell my Principal Place of Residence (no CGT) which is now too big for just me (recently escaped my husband….oops! I mean recentley divorced!)
Although I am not familiar with SA Property Law, I am guessing that the process to convert from Moiety Title to Torrens may be similar to achieving qualified title for an Old Systems Property. You'd be best advised to speak with your solicitor prior to committing to the property to confirm if this is the case or whether you need to get both/all parties to agree to the conversion of the title.
Hi Flyingsolo,
How did you go with the moiety title? Did you manage to convert it to Torrens title?
Would you mind letting me know which bank lent against the property? I have found a great property on a moiety title and the other owner is happy to convert. So far, I have found only Westpac will lend against moiety title and only 70%.
Thanks
Tarah
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