Titled vs Untitled Land in Victoria: What Changes in Your Contract

The estate brochure shows two blocks side by side: one 'titled' and ready to settle, the other 'untitled' with titles 'expected' next year. Before you choose, check what each contract lets you do while you wait.

The short answer: A titled lot already has its own folio, meaning its own record of title on the Victorian land register, so you can settle on the date in the contract. An untitled lot sits on a plan of subdivision that hasn't been registered, so you sign an off the plan contract and can't take possession or settle until registration. The Sale of Land Act 1962 caps that deposit at 10%, requires it to be held on trust until registration and lets you end the contract if registration runs past 18 months or another period the contract specifies.

What's the difference between titled and untitled land?

The difference is whether your lot exists on the register yet. A plan of subdivision divides a larger parcel into new lots, and when it's registered, the plan becomes the title diagram for the new folios of the register. A titled lot has been through that step, so its folio already exists.

An untitled lot is still on a plan that hasn't been registered under section 22 of the Subdivision Act 1988. The Sale of Land Act calls a contract for that lot an 'off the plan contract', whether or not the plan has been certified, an approval step that comes before registration.

What can you do with untitled land before registration?

Until the plan is registered, you can't take possession of the lot or settle. Under section 9AD, a buyer under an off the plan contract isn't entitled to possession, meaning the right to occupy and use the lot, before registration, and the vendor must not require you to take it. In practice, site works and your build wait for registration and settlement.

Settlement, when you pay the balance and ownership passes to you, can't happen earlier because your lot's folio only comes into existence at registration. Check how your contract says you'll be told of registration and how long you then have to settle.

How much deposit do you need for untitled land?

For an untitled lot, the deposit can't exceed 10% of the price. Section 9AA requires the contract to have it paid to the vendor's legal practitioner, conveyancer or licensed estate agent and held on trust for you, meaning kept for your benefit, until the plan is registered. The contract must also carry a conspicuous notice that you can negotiate the deposit within the 10% limit.

Our guide to off the plan deposit protection under section 9AA explains how the money is held while you wait. For a titled lot, the off the plan cap doesn't apply and the deposit is whatever the contract sets.

What if the titles take longer than promised?

You may be able to end the contract and recover your deposit. Under section 9AE(2), if the plan isn't registered within 18 months after the contract date, or within another period your contract specifies, you can rescind, meaning formally cancel the contract, at any time after that period ends and before registration. Section 9AF then entitles you to the immediate return of your deposit, less any occupation fees you've paid to occupy the property. Check which period your contract uses, and note that the right ends once the plan is registered.

A vendor's power is narrower. Under a sunset clause, a term allowing the contract to be ended if the plan isn't registered by a set date, a vendor can rescind a residential off the plan contract only after giving you at least 28 days' written notice of the reasons and the delay and getting your written consent, or with a Supreme Court order. If that notice arrives, our guide to sunset clauses and getting your deposit back covers your next steps.

Which land specific disclosures should you check before signing?

Three rules deal with the ground, the plan and the boundaries of a new lot:

Earthworks. Under section 9AB, the vendor must disclose in the contract any works it knows of affecting the natural surface level of your lot, or of adjoining land in the same subdivision, carried out after the plan was certified and before the contract date, or being carried out or proposed at that date. Fill and cut can affect your later slab design.
Plan changes. If the plan is amended before registration, at the vendor's request or because the Registrar who registers plans requires it, section 9AC requires the vendor to tell you in writing within 14 days, and you may rescind within 14 days of that advice if the change materially affects your lot. Under section 10, you may also avoid the sale, meaning treat it as cancelled, before registration if a later amendment restricts or limits the use of your lot, unless it results from a public authority's or government department's recommendation. The contract can exclude the final location of an easement (a right someone else holds over part of your land) shown on a certified plan. Our guide to section 9AC off the plan rights explains what counts as material.
Boundaries. Section 20A of the Subdivision Act requires a licensed surveyor to give the council written advice that the boundaries are marked out and whether there's a substantial discrepancy between a boundary and the plan. If that advice was still outstanding at the contract date and later reports a substantial discrepancy, section 9AH lets you avoid the sale only if the contract hasn't been completed, you haven't disposed of (sold or transferred) the land and no more than 18 months have passed since the contract date.

These sit alongside the usual checks on easements and restrictions. Reading the plan of subdivision shows where those appear, and our guide to buying land in Melbourne covers the general checks for any vacant block.

Why does the wait matter for finance and valuation?

With an untitled lot, the price is fixed when you sign, but you only own the land after registration and settlement. Consumer Affairs Victoria warns that substantial time may pass between signing and owning the property, that its value may change in that time and that it could be worth less than the contract price at settlement. It adds that you may have problems getting your loan approved if the value falls or the completion date changes.

With a titled lot, the settlement date is in the contract when you sign. Lending policy varies, so ask your lender how it treats an untitled lot before you sign.

Comparing two blocks: an example

Suppose Priya is choosing between a titled lot at $420,000 that can settle 60 days after signing and an untitled lot at $405,000 with titles 'expected in 12 to 15 months'. The untitled contract sets a 24 month registration period and discloses fill along the rear boundary. If she signs it, her deposit stays on trust and her build waits for registration and settlement.

If the plan is still unregistered at 20 months, she can't rescind under section 9AE, because her 24 month period hasn't ended. If the lot is valued below $405,000 when she comes to settle, she may have problems getting her loan approved. She weighs those dates and the fill disclosure against her own timetable, alongside the $15,000 price gap.

Frequently asked questions

Is it riskier to buy untitled land? The risks are different. You wait longer to own the land, its value may change before settlement and your loan approval may be affected, while the Sale of Land Act protects your deposit and gives you ways out for certain plan changes and long delays. Whether that suits you depends on your finance, your build timetable and the specific contract.

Can I start building before the title is issued? No. You aren't entitled to possession of an untitled lot before the plan is registered, so works on it wait until registration and settlement. Allow for that when you time any building contract.

Who tells me when the land is titled? Your contract sets out how you'll be told that the plan has been registered, and your conveyancer can confirm the new folio exists before you settle. Our guide to the statement of compliance covers the council step in the lead up to registration.

About the Pearson Chambers Conveyancing team

Pearson Chambers Conveyancing acts on residential purchases, sales and title transfers across Melbourne and Victoria. That includes off the plan land contracts in new estates, where we review the plan of subdivision, the registration period, the deposit terms and the buyer's rights under the Sale of Land Act.

Sources we consulted

Get your land contract reviewed before you sign

If you're weighing a titled lot against an untitled one, our team can go through the contract and the Section 32 statement, the vendor's disclosure document, as part of a complimentary contract and Section 32 review before you sign. We'll look at the registration period, the deposit terms and the plan disclosures.

Email contact@pearsonchambers.com.au.

General information only, current as at the date of publication. Victorian conveyancing rules and legislation change frequently. Please contact the Pearson Chambers Conveyancing team for advice on your specific contract.