![[object Object]](/lib_lphGCikIbVHjRWIV/w8mzrofmgaa9b3om.png?w=52){kind=small}
You are standing at an open for inspection in Brunswick or Point Cook. The agent waves a brochure and says something like, 'It is a clean, clear title, nothing to worry about'. Everyone nods, but you may walk away wondering what that actually means for you when you sign a contract.
The phrase 'clear title' sounds simple. In Victorian conveyancing though, it carries a bit of legal weight. It touches on who really owns the property, whether anyone else has rights over it, and what must happen at settlement for you to get the home you think you are buying.
This guide unpacks the idea of clear title in the Victorian system, with a Melbourne focus, so you can read contracts and speak to agents with far more confidence.
How Titles Work in Victoria, in Plain Language
Every piece of land in Victoria is recorded in the Victorian Register of land, which is run by Land Use Victoria under the Torrens title system. For each property there is a 'folio' that shows the registered owner, a description of the land, and any registered interests such as mortgages, caveats, leases and some other restrictions.
Understanding Your Title Search
When you order a title search, you get a copy of that folio at a point in time. It shows:
- who the registered owner is
- the lot and plan details that tie the land to a plan of subdivision
- any recorded encumbrances such as mortgages, easements, covenants, leases and caveats.
A complete certificate of title or register search statement is a key part of a Section 32 vendor statement and is often needed for planning or building applications as well.
Electronic Certificates of Title in Victoria
In the past, owners often held a paper certificate of title in a safe or with their bank. Victoria is now moving fully to electronic certificates of title, with all new titles issued electronically from 3 August 2024. Existing paper titles remain valid until they are next used in a transaction, then they are converted to electronic form.
The move to an electronic system does not change what clear title means, but it does change how titles are controlled and released at settlement.
So, What Does 'Clear Title' Actually Mean?
When people in Melbourne talk about clear title, they usually mean one of two related ideas.
1. Clear Title as 'No Mortgage'
In lending and title control language, a property with clear title is one where there is no registered mortgage, so the owner holds the property outright. In that situation, electronic title control is usually held by the owner's legal representative instead of a bank.
If you have paid your home loan in full and the discharge has been registered, you might say, 'We now have clear title to the property'. That is a big moment for many homeowners.
2. Clear Title at Settlement for a Buyer
The contract and Victorian law expect that at settlement you receive title:
- in your name as the new registered owner
- free of the seller's mortgage and other removable debts
- subject only to the encumbrances that were properly disclosed and that you agreed to accept, such as an easement running along the back fence or a recorded restrictive covenant.
So a property can still have easements, covenants or even a long lease on it, and you may still be receiving 'clear title' in the sense that you are getting exactly what the contract promised, free from the seller's mortgage and any surprise claims.
Encumbrances: The Things That Sit on Title
To understand clear title, you need to know what can sit on a title in the first place.
Consumer Affairs Victoria and Land Use Victoria use the word 'encumbrance' for any third party right that limits unencumbered use or transfer of a property. Examples include mortgages, easements and caveats.
Common Encumbrances You Will See in Victorian Title Searches
Mortgages
A mortgage is your lender's registered interest. It gives them the power to sell the property if the loan is not repaid. The bank's name will appear on title until the mortgage is discharged and the change is registered.
Easements
An easement lets someone else use a part of the land for a particular purpose, such as drainage, sewerage, or a shared driveway. In many Melbourne suburbs, there is a drainage easement running along the rear boundary that you cannot build over without council consent.
Restrictive Covenants
A covenant is a promise that restricts how the land can be used or developed. For example, some estates in suburbs like Cranbourne or Mernda have covenants controlling front fence heights or requiring homes to meet certain design guidelines, which can limit future renovations.
Leases
A registered lease gives a tenant rights that can bind a new owner. If you are buying a tenanted investment property, your conveyancer will help you understand how long the lease runs and what rights you are stepping into.
Caveats
A caveat is a warning recorded on title that someone claims an interest in the land. It could be a purchaser under an earlier contract, a former partner, or a party who lent money secured against the property. The presence of a caveat usually means settlement cannot proceed smoothly until that claim is dealt with.
These items do not automatically make a property 'bad'. Many are routine. The key is whether they have been disclosed, whether they suit your plans, and whether they will still be there once you become the owner.
Clear Title for the Seller, the Buyer and the Bank
It helps to think about clear title from three angles: the seller's, the buyer's and the lender's.
For the Seller
The seller promises in the contract to transfer the property according to the contract terms. The standard Victorian contract of sale expects the buyer to accept certain encumbrances, such as easements or leases, that are disclosed in the Section 32 vendor statement, but not the seller's mortgage or undisclosed claims such as surprise caveats.
To deliver clear title at settlement, the seller needs to:
- arrange for their bank to attend settlement and discharge the mortgage
- resolve or remove any caveats that should not remain on title
- ensure any other encumbrances match what was disclosed to the buyer.
For the Buyer
As a buyer, you want to know that:
- you will be registered as proprietor after settlement
- the seller's mortgage and personal debts will not follow the property
- the only restrictions on your use and development of the land are the ones you knew about when you signed.
That is what clear title means from your side. If new encumbrances appear between contract and settlement, or something material was not disclosed, you may have rights under the contract or under Victorian consumer law, but the situation can become stressful and time sensitive.
For the Bank
Your lender wants security over a property where their mortgage will rank as expected. They expect the seller's mortgage to be discharged and any problematic caveats or prior rankings to be dealt with before the new mortgage is registered. Licensed conveyancers spend a lot of time liaising with banks and other mortgagees so this part happens properly and clear title is delivered at settlement.
How Your Conveyancer Checks for Clear Title
When you engage a conveyancer before signing, you give yourself the best chance of avoiding title headaches later.
Here is what usually happens behind the scenes.
1. Title Search and Plan Search
Your conveyancer orders a current title search and, often, the plan of subdivision for the property. This confirms:
- the exact parcel of land you are buying
- who currently owns it
- what encumbrances are already on title.
If you are buying in an older inner city suburb like Fitzroy, the plan may reveal narrow laneways, party walls or older easements that affect how extensions or garage conversions might work. In a new estate in Rockbank, the plan could show shared driveways or services running through lots in ways that catch first home buyers by surprise.
2. Careful Review of the Section 32 Statement
In Victoria, the seller must provide a Section 32 vendor statement that discloses key information about the property, including title details, zoning, services, and any known encumbrances that can restrict development.
Your conveyancer compares the Section 32 against the title search to ensure:
- mortgages and encumbrances line up with what is shown on title
- any disclosed restrictions, such as covenants or easements, are properly described
- there are no obvious gaps or red flags.
If something does not add up, they will raise enquiries before you sign, or seek amendments to the contract to protect you.
3. Contract and Special Conditions
The contract itself sets out what the seller must do at settlement. Standard Victorian contracts say the buyer takes the property subject to encumbrances shown in the Section 32 (other than mortgages and caveats) and free of any other encumbrances.
Your conveyancer checks special conditions for anything that might leave you with unexpected burdens on title. For example:
- a condition that you must accept a proposed owners corporation rule that restricts short stay letting
- an agreement to accept a future easement or restriction that has not yet been registered.
Sometimes these are acceptable. Sometimes they are not. Either way, you should know before you sign.
4. Liaising with Banks and Other Parties
Once you are on track to settlement, your conveyancer liaises with:
- your lender, to get loan documents and arrange the new mortgage registration
- the seller's lender, to make sure their mortgage will be discharged
- any other parties with an interest on title, such as caveators, if their claim needs to be removed.
All this coordination is done so that at the end of settlement, the seller's mortgage and any removable encumbrances are cleared, and your name and your bank's mortgage move into their proper place on the register.
Everyday Melbourne Examples of Clear and Unclear Title
Sometimes it helps to picture real life scenarios.
The Carlton Terrace with a Rear Easement
You buy a Victorian terrace in Carlton. The title shows an old drainage easement along the back 1.5 metres of the block. You knew about it from the Section 32, and you do not plan to build over that strip. The seller's bank discharges its mortgage at settlement. You become the owner, subject to that easement.
Here, you receive clear title in the sense that you own the property outright, subject only to the easement you knew about and accepted.
The Point Cook Townhouse with a Surprise Covenant
You sign a contract for an off the plan townhouse in Point Cook, without advice. Later, you discover there is a restrictive covenant stopping you from parking a work van in the driveway overnight and requiring any shed to meet strict design rules. The covenant was recorded on title when you signed, but you did not realise how restrictive it would be.
The title is still 'clear' from the seller's side, but it may not feel very clear to you. This is a good example of why early advice and a thorough Section 32 review matters.
The Reservoir House with an Old Caveat
You are keen on a house in Reservoir. The title search shows an old caveat lodged years ago by a business partner of the current owner. The Section 32 mentions it but does not explain whether the dispute has been resolved.
Your conveyancer asks for the caveat to be removed before settlement or seeks contractual protection, such as a condition allowing you to walk away if the caveat is not withdrawn in time. Without that step, settlement could fail because the property is not capable of being transferred with clear title.
What Can Go Wrong When Title Is Not Clear?
When title problems surface late in the process, buyers and sellers can face:
- delayed settlement and extra costs
- default interest under the contract
- the risk of the contract being cancelled
- stress and uncertainty just when you thought you were planning the removalists.
Examples include:
- a bank refusing to discharge a mortgage because the seller is in arrears
- a caveator refusing to withdraw a caveat unless a separate dispute is resolved
- an undisclosed encumbrance that gives the buyer grounds to complain or even avoid the contract.
Sorting these issues out is much harder the week before settlement than it is before contracts are signed. That is why getting clear on title early is so important.
How to Protect Yourself When You See 'Clear Title' in Melbourne Property
Here are some practical steps you can take.
1. Do Not Rely on Sales Language Alone
Phrases like 'clean title' or 'no issues with title' are often used by agents as general reassurance. They are not a substitute for a proper title search and legal review. Treat them as a starting point, not the final word.
2. Always Get a Current Title Search
Ask for a recent title search and plan of subdivision for any property you are seriously considering. If the documents provided at inspection look old, your conveyancer can order fresh copies so you know exactly what is on title right now.
3. Have the Section 32 and Contract Reviewed Before You Sign
In Melbourne, it is very common to have a conveyancer or property lawyer review the Section 32 and contract and give written comments before you sign. They will look for:
- hidden or confusing encumbrances
- special conditions that might leave you exposed
- issues with services, zoning or building approvals that might not show on title alone.
At Pearson Chambers Conveyancing, we offer a complimentary pre purchase contract and Section 32 review so you can get this guidance before you commit.
4. Be Honest About Your Future Plans
Telling your conveyancer what you want to do with the property makes a big difference. There is a big gap between someone planning to land bank an empty block in Werribee and someone wanting to knock down and rebuild a family home in Glen Iris.
If your plans clash with a covenant, easement or owners corporation rule, you will want to know that early and either negotiate changes, budget for extra approvals, or choose another property.
5. Engage Help Early for Auctions and Tight Deadlines
Melbourne auctions move quickly. If you bid and the hammer falls, you are locked in. There is no cooling off period for most auctions in Victoria. Getting your Section 32 and contract reviewed, and your title position checked, before auction gives you a far clearer picture of what you are buying and whether the title will be acceptable to you and to your bank.
Ready to Talk About Clear Title?
Buying or selling in Melbourne should feel exciting, not like a guessing game about what sits on the title. Understanding what clear title really means in Victoria can help you ask better questions, spot red flags early and sleep more easily on the night before settlement.
If you are looking at a property and you are not sure how easements, covenants, mortgages or caveats might affect you, the team at Pearson Chambers Conveyancing can walk you through it in plain language. We review Section 32 statements and contracts every day for buyers and sellers across Melbourne, from inner city apartments to larger blocks on the fringe, and we know the patterns that cause problems later.