Title Insurance provides buyers of commercial real estate with an added layer of protection against legal risks that are not covered by the ownership (“title”) protections built into the Torrens land registration system.
What is the Torrens land registration system?
Australia and New Zealand operate under the Torrens land registration system (Torrens System). Under the Torrens System, the government maintains a central register of land ownership and property interests. Ownership (“title”) of such interests is not proven by historical deeds. Rather, title is guaranteed upon registration in the register (subject to limited exceptions).
Once a party is registered in the register, their interest is generally secure and, subject to some limited exceptions, cannot be defeated (also known as “indefeasibility”). This means a transaction cannot easily be set aside, even if previous transactions had defects.
If title is guaranteed, why do I need Title Insurance?
It is a common misconception that, due to the concept of indefeasibility of title, Title Insurance is not needed.
While the Torrens systems may help to defend landowners against adverse ownership claims, its scope for other legal matters is limited. Title Insurance extends protection beyond pure ownership elements and covers a range of other matters that can impact value, use or marketability of a property.
This includes, but is not limited to:
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In addition to this, although the Torrens System provides a strong shield to defend ownership challenges, it does not altogether prevent a third-party from commencing a claim. Such a claim could arise from issues such as fraud, land registry errors or specific prior interests and may result in significant legal costs being incurred. Title Insurance can cover these substantial legal costs associated with defending your title in the event of such a claim. Title Insurance therefore acts as both a risk transfer mechanism and an expense mitigation tool. |
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Key benefits of Title Insurance
Title Insurance provides buyers with an added layer of protection, providing key benefits such as:
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Enhanced confidence Title insurance provides buyers with greater confidence that their investment is safeguarded against certain legal risks not addressed by the Torrens System. |
Cost-effective A one-off premium paid that provides protection for the period of ownership. |
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Protection from hidden issues Covers risks that may not be discovered during standard due diligence, like illegal structures or boundary encroachments. |
Bespoke and adaptable A flexible policy, that can be structured to extend cover to lenders and/or sellers. |
Title Insurance appetite
- We insure commercial real estate located in Australia, New Zealand, Hong Kong and Singapore.
- Up to USD 150 million of cover is available per asset/transaction.
For any questions about the available products or our appetite, please reach out to the Title Insurance team at [email protected].
Chris Hammond
Head of Title Insurance
+61 (0)481 130 382
Any product information discussed in this blog is subject to the terms and conditions of the policy, eligibility criteria, any additional premium for optional cover, limitations and exclusions.
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The information contained in this blog is intended for licensed insurance brokers and other authorised intermediaries only. DUAL issues insurances on behalf of Certain Underwriters at Lloyd’s of London and/or Allianz Australia Insurance Limited, acting as their agent. The information is of a general nature and does not take into account the objectives, financial situation or needs of any person. It is intended for the use of professional intermediaries who are expected to consider whether it is appropriate for their clients. Before recommending or offering any insurance product, intermediaries should read the policy wording, relevant Product Disclosure Statement (PDS) and Target Market Determination (TMD) and assess whether the product is suitable for their client’s circumstances. These are available on request or via our website at DUAL Australia.