Titled and untitled
New estates are built in stages. The developer builds the roads, drains and services, the council and the authorities sign off, and then the plan of subdivision is registered with the land titles office. Only at that point does each lot receive its own title. If you buy before then, you are buying a lot that is described on paper and does not legally exist yet.
What untitled means in practice
- You pay a deposit now and the balance at settlement, which is usually a set number of days after registration.
- Building cannot start until you own the land.
- Your finance approval may expire before settlement and need to be renewed.
- The building price may only be held for a set period.
- The final dimensions of the lot can vary slightly from the plan. The contract says how much variation is allowed.
The sunset clause
A sunset clause sets a deadline for registration. If the plan has not been registered by the sunset date, the contract can be brought to an end and the deposit returned. It protects a buyer from being tied to a contract that never completes.
The clause has also been used the other way. In a rising market a seller could let the date pass, end the contract and sell the lot again for more. Several states have changed their laws so that a seller generally cannot end a residential contract under a sunset clause without the written consent of the buyer or an order of a court. The rules are not the same everywhere, so ask your conveyancer how it works in the state you are buying in.
What to check
- The sunset date, and who is allowed to end the contract when it passes.
- Whether the seller can extend the date, and by how long.
- The expected registration date, and how often it has already moved.
- What happens to your deposit, and to any interest earned on it.
- How long your building price is held, and what happens after that.
- How long your finance approval lasts.
Which is better
Titled land removes the waiting and most of the uncertainty. You can settle, the builder can start and your costs are known. Untitled land can offer a wider choice of lots and more time to prepare before settlement, in exchange for dates that nobody controls. Neither is wrong. What matters is knowing which one you are buying and having the dates in your two contracts line up.
A licensed conveyancer or solicitor reviews these clauses. We keep the land and build timelines in step around the dates they confirm.