Property Law, Land Tenure and Interests in Land
Property Law, Land Tenure and Interests in Land tests your ability to identify exactly what is being valued. The estate or interest, title restrictions, lease terms and encumbrances can change value more than the physical building.
Estates and titles
Fee simple is the fullest estate. Leasehold estates, unit titles, cross-leases and licences confer lesser rights. Under the Torrens system in the Land Transfer Act 2017, the register is central; indefeasibility protects a registered proprietor except for fraud and limited statutory exceptions. A title search reveals mortgages, easements, covenants, consent notices and encumbrances.
Easements, covenants and leases
An easement grants a right over another's land, such as drainage, access or services; it may burden or benefit the subject. A restrictive covenant limits use, for example height or commercial activity. A lease creates a leasehold estate, and its rent, term, reviews and renewal rights drive value. Unit titles add body corporate levies, common property and weathertightness exposure.
Worked example
A 500 m² residential site has a drainage easement across the rear 60 m². Comparable sites without the easement sell at $1,000/m². The easement prevents a garage and reduces usable area, so you apply a 10% discount to the affected area, not the whole site: $1,000 × 60 × 10% = $6,000, plus any market stigma. Explain the effect rather than simply guessing.
Traps
- Valuing the building while ignoring the estate or leasehold tenure.
- Confusing a cross-lease with a unit title.
- Missing a covenant or consent notice on the title.
- Assuming an easement has no effect because it is not visible.