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Common Terms

There are many words that may not be familiar to you when you are dealing with land and construction, this glossary is to make them easier to understand.

If you have any questions or want to learn more please get in touch or arrange a short consultation with Rachelle.


A caveat is a Latin word loosely meaning “warning”. When used in the legal context, it is commonly used to describe a formal warning placed on the title to land.  The caveat serves as a warning to any other party searching the title of the land that the person who lodged the caveat on title (caveator) has an interest in the land. Subsequently, it prevents any further dealing with the land & the owner of the property cannot sell or re-finance the land to a third party until the caveator or a court has removed it. Examples of Caveators are a creditor, spouse, business lease holder.

Certificate of Occupancy

The Certificate of Occupancy certifies that a home can be lived in. It is a requirement of most local government or shire councils that an occupancy certificate be issued prior to the purchaser of a home taking occupation. It contains information so that review inspections of a completed build can be performed.  ​

Contract of Sale

The Contract of Sale is the term used to describe the document prepared by a lawyer, and used to formalise the sale of real estate.

The document itself usually contains numerous conditions, that set out the “rules” by which the deal will proceed and eventually settle. Also see Section 32


The legal process to transfer property from one person to another.


A covenant is a written agreement between the seller and purchaser of a piece of land restricting what the land can be used for. For example, restricting the type of building material the purchaser can use.

Discharge of mortgage

A discharge of mortgage is a type of dealing lodged by a bank or financial institution, after a mortgage has been repaid. On registration, reference to the mortgage is removed from the title.


An easement is a right held by someone to use land belonging to someone else for a specific purpose. Common examples of easements are drainage, sewerage and carriageway easements.


An encumbrance is an interest in a piece of land by someone other than the registered owner. Encumbrances place limitations on a property. Examples include mortgages, easements, leases and restrictive covenants.

Joint tenants

Ownership of land in common by two or more persons where there is a right of survivorship. That is, upon the death of one joint owner, the land as a whole passes to the survivor(s). Your manner of holding will default to joint proprietorship if you do not specify your preference in the transfer of land document. See also Tenants in Common and Sole Proprietorship

Land title

A land title is an official record of who owns a piece of land. It can also include information about mortgages, covenants, caveats and easements affecting the land.

Land Transfer Duty- see Stamp Duty

Lenders Mortgage Insurance- LMI

LMI is a fee banks and other finance lenders charge borrowers when they are deemed high risk. Usually, this is when their deposit is less than 20% of their property’s purchase price and the lender is loaning more than 80% of the property value.  LMI can either be paid upfront or capitalised into the loan.


Most people who buy a house need to borrow some part of the purchase money, usually from a bank. The bank will normally require a mortgage to be given by the borrower as security for the repayment of the loan. The mortgage is registered on the title to the property. A mortgage sets out the terms and conditions of the loan, including the rights of the bank in the event that the borrower fails to repay the loan.

Negative Gearing

Negative gearing is the term used for when the costs of owning a property for investment purposes is more than the amount of rental income you are gaining. The benefit of negative gearing for an investor is their tax bill is reduced via property expense & depreciation claims. Effectively meaning your tax dollars are going towards an asset rather than in the Government coffers. Over time, the property will increase in value and there will be equity that can be used for further investment. (also see Positive Gearing )

Off The Plan (OTP)

Buying off-the-plan means committing to buy a property before it’s finished being built. This often means before it’s started to be built, but not necessarily: even if the property is well on its way to being finished, it’s still technically an off-plan purchase

Plan of subdivision (LP or PS)

A plan that depicts the break-up of a piece of land, showing parcels of land, commonly called ‘lots’, that can be sold separately.

Positive Gearing 

Positive gearing is when the income you are making by renting out the property is more than what the investment property expenses are, such as your loan repayments, maintenance and repairs. This means you will have “extra” money but may need to pay additional tax on the net income as a result.​

Section 32

The Section 32 is a document provided by the seller of real estate (vendor) to an intending purchaser

which requires a vendor to provide certain information to a purchaser BEFORE a contract of sale is signed. It contains information on the property such as the land title, plan of subdivision, covenants.

Sole proprietorship

A parcel of land owned by a single person.

Stamp Duty

Stamp duty is also known as Land Transfer Duty. It is a tax on a property transaction that is charged by each state and territory, the amounts can and do vary. The duty rate will depend on factors such as the value of the property, if it is your primary residence and your residency status.


Subdividing means dividing land into two or more parts that can be sold separately. A plan of subdivision shows this break-up


Surveyors mark land boundaries – the lines that run between properties. They confirm existing boundaries, create new ones when land is subdivided or a development is being planned and provide advice on boundary issues.

Tenants in common

Ownership of land by two or more people where each person is entitled to occupy the whole of the land in common with the others, but where none of them are entitled to the exclusive possession of the land. On the death of one of the proprietors, their share does not pass on to the survivors, but passes to the executor or administrator of the deceased. You can specify that shares be equal or unequal, between people owning a parcel of land as tenants in common.

Transfer of land

Changing ownership details on a title is known as a transfer of land.

Volume and folio

Volume and folios are unique identifiers used in the numbering system that identifies individual land titles, relating to freehold land, Crown grants and Crown leases.



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