What Are Some Common Legal Problems with Property Ownership in Australia

In Australia, three of the most common legal issues with property ownership are caveats, illegal encroachments and property liens. Let’s explore what each of these means and how they can potentially affect your ownership of a property.

Property ownership is something that many Australians aspire to. However, once you become a homeowner, it’s not always all good news. Property ownership comes with many responsibilities, some of which can turn into legal problems. Here’s what to look out for when it comes to legal issues with property ownership.

What is a caveat?

A caveat is a notice recorded on the title of a property to protect the interest of a person who believes they have a claim to the title. For example, a couple in the middle of a divorce with one partner not on the title, that partner might lodge a caveat within family law interest.

What is the purpose of a caveat?

The two primary purposes of a caveat are:

• To warn the relevant Registrar of Titles of a claim; and
• To ensure that the caveator is given notice to oppose any dealing with the title, such as a transfer of ownership before it can take place.

It’s important for people to be careful when lodging a caveat – if they are found to have done so without having a reasonable cause, they could face legal and financial consequences. If you discover a caveat on the property you are looking to buy, your best solution is to seek advice from a conveyancing lawyer. A property caveat can delay your property settlement, so you will need to know more about the case.

Enlisting the services of a reputable and experienced conveyancing lawyer can also safeguard you against the consequences of a caveat being used during a property sale. If the caveat requires settlement in court, your conveyancing lawyer can take you through the entire process.

What are property liens?

A property lien is a legal claim against a property by creditors. By claiming a lien, they can legally collect what they are owed from the owner.

The most common liens are mortgages where the lender has the right to claim the loan amount against the house if you cannot make repayments. Other types of liens are:

• Construction liens: these are liens filed against a property by contractors such as builders, plumbers and architects when they aren’t paid for work that they have done on the property. 
• Judgment liens: if a homeowner has lost a court case and a financial judgement was made against them, they may be subject to having a judgment lien placed on their property.
• Tax liens: If a property owner fails to pay taxes, the Australian Taxation Office can place a tax lien on that person’s property to collect what is owed to them.

What is an illegal encroachment?

When a structure or fixture from a neighbouring land intrudes onto another property, that is called an illegal encroachment. An example would be part of the house being built onto the adjoining land or a pergola overhanging the boundary line. 

Illegal encroachments are almost always made by mistake. In the case of structures, encroachments are usually due to an error in defining the property limits or a flaw in the property title’s description of the boundaries. 

It could be an easy fix if the encroachment is easy to remove or trim, such as a tree branch or retractable object. The situation also depends on how cooperative your neighbour is. Even an easy fix can cause disputes, and it might be necessary for you to involve a real estate lawyer to remove the easement.

If an illegal encroachment issue can’t be resolved informally, or if the problem is a significant structure, the case may need to proceed through court. 

The court has the power to make a decision that is considered fair for both parties, including:

• Payment of compensation to the landowner who is affected by the encroachment;
• Ordering the transfer or lease of the land subject to the encroachment; and
• Removal of the encroachment by the encroaching property owner.

When dealing with an illegal encroachment, it is wise to seek legal advice regarding your rights and responsibilities.

While buying a property is an exciting time, it’s always wise to be aware that there could potentially be legal problems that you will need to deal with. That’s why you should always involve a conveyancer as soon as you have access to a contract of sale. If there are any discrepancies on the sale documents or section 32, such as encroachment issues or other claims on the title, a property conveyancer will be able to help you through the process.

For more information about Jim’s Property Conveyancing in Melbourne, or for information about Jim’s Property Conveyancing in Brisbane. Or for expert advice on property conveyancing services in Australia, please get in touch with our friendly and experienced staff on 13 15 46.