When a property is sold in Australia, one of the most important things to check is whether it is subject to any encumbrances. An encumbrance is a legal right or interest held by someone other than the property owner, which can affect how the property is used, sold, or transferred.
Common examples include mortgages, caveats, easements, and restrictive covenants.
If a property is sold subject to any encumbrances, it means those interests remain in place and may carry over to the new owner. This can limit your ability to make changes, use the land freely, or, in some cases, even take ownership until certain conditions are met.
Whether you’re buying or selling, it’s essential to understand what encumbrances are, how to find them, and what to do if they come up.
How to Find Out If a Property Is Sold With Existing Encumbrances
An encumbrance is a legal burden or restriction on a property. It could be something like a mortgage, a caveat, an easement, or a covenant. These are listed on the property’s Certificate of Title, which is held with the land registry in your state or territory.
To find out if a property is subject to any encumbrances, you’ll need to:
Order a title search: This is a legal document that shows who owns the property and lists any registered encumbrances. A conveyancer or solicitor usually orders this for you.
Review the contract of sale: In most cases, any known encumbrances must be disclosed in the contract. Your conveyancer will go through the fine print to make sure nothing is missed.
Ask the right questions: If you’re the buyer, ask if the seller is aware of any unregistered encumbrances, like informal agreements or unpaid debts that could affect the property.
Encumbrances aren’t always bad. Some are common and harmless, like an easement that allows water pipes to run under a part of the property. Others, like a mortgage or a caveat, need to be dealt with before the property can be transferred properly.
Also Read: Things to Check Before Signing House Contract in QLD
Can You Legally Sell a Property in Australia That Has an Encumbrance on Title?
Yes, you can sell a property that has an encumbrance on title, but there are conditions.
If a property has a mortgage, it must usually be paid off and discharged before settlement, unless the buyer agrees in writing to take it on. A caveat (a claim someone places on the property) needs to be cleared or withdrawn before settlement too, or it could block the sale.
Easements and restrictive covenants are different. These stay with the land, which means the buyer accepts them as part of the purchase. The seller must clearly disclose them in the contract, and the buyer should understand how they affect the use of the land.
Here’s what matters legally:
Full disclosure: Sellers are required to inform buyers about any registered encumbrances. Failing to do so may breach legal obligations and could lead to delays or disputes.
Proper release of certain encumbrances: If the property is sold subject to a mortgage or caveat, these must be released or cleared before the title can be transferred to the new owner.
Buyers should always ask their conveyancer to check the contract thoroughly. Sellers should be upfront and let their conveyancer know about anything that might affect the property.
What Are Your Options If You’ve Purchased a Property and Later Discover an Undisclosed Encumbrance?
Sometimes, a buyer might find out after settlement that the property is subject to an encumbrance that wasn’t disclosed. This can be stressful, especially if it affects your plans for the land or home.
Here’s what you can consider:
Talk to your conveyancer or lawyer immediately: They can look at the contract and title documents to see what was supposed to be disclosed.
Contact the seller through legal channels: If the encumbrance was meant to be disclosed but wasn’t, the seller may be in breach of contract.
Review your options under consumer or property law: In some cases, you may be able to seek compensation or have the encumbrance removed, depending on the situation.
Check with the land registry: Sometimes errors or delays in registration happen. Your conveyancer can help fix these through the right process.
The good news is that most encumbrances are easy to spot if a proper title search is done before buying. That’s why working with an experienced conveyancer is so important. They help you avoid surprises later by carefully reviewing all the paperwork before you sign anything.
Also Read: What to Know When Buying a House in QLD
Don’t Let Encumbrances Catch You Off Guard
If you’re asking, “Is the property sold subject to any encumbrances?”, you’re already on the right path. This is one of the smartest questions a buyer or seller can ask. Knowing the answer helps protect your rights, your plans, and your peace of mind.
The process can feel complicated, but it doesn’t have to be. With the right professional by your side, you can feel confident that every step is being handled with care.
Need Expert Help? Let CJC Law Assist You Today
Got questions about whether a property is sold subject to any encumbrances? Need someone to review your contract or title? At CJC Law, our experienced conveyancers make things simple and stress-free.
We’re here to support buyers and sellers across Australia with clear advice and reliable service. Contact us today and let’s make your next property step a smooth one.
