September 20, 2019

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Australian Real Estate Law

In Australia, the operation of the Torrens system grants the holders of registered property rights indefeasible title. Land rights are transferred and registered not through the execution of deeds but through the registration of title in the land register.  Read below to learn more about Australian Real Estate Law

Real estate transactions

Before an agreement for sale and purchase is executed, there are several possible pre-contractual agreements, an option agreement being a popular choice. The prospective purchaser pays an option fee in exchange for the chance to enter into an option agreement, which constitutes a promise between the vendor and purchase to enter into the future sale and purchase of the property. Upon acceptance of the option agreement, the purchaser usually pays an additional sum towards the purchase price.

Once the terms have been finalized, the parties can enter into a sale and purchase agreement. If an option agreement has been accepted by the purchaser, the terms of the option agreement may operate as a sale and purchase agreement and there will be no further need for an additional sale and purchase agreement.

Following completion of the sale and purchase, the transfer or ownership must be lodged with the appropriate registry.

Under the Torrens system, a transfer of title is successful once it has been registered. The appropriate transfer in the prescribed format must be lodged, stamped and registered.

Restrictions on foreign investors

In Australia, it is mandatory for non-Australian purchasers to notify the relevant government bodies before purchasing any real estate classified as urban. Non-Australian tenants looking to lease urban real estate for more than five years must do likewise.

Non-Australian purchasers must also obtain approval from the government and all agreements for sale and purchase are subject to government approval. The Foreign Acquisitions and Takeover Act 1975 not only invalidates agreements that attempt to circumvent this requirement but also imposes severe penalties on guilty parties.

Various types of commercial property are exempt from the above restrictions, namely fully developed and built commercial property valued at A$50 million and properties listed as heritage sites valued at A$5 million, as well as fully developed and built commercial property that will be put to immediate use for industrial purposes in the course of the purchaser’s pre-existing commercial activities. By virtue of the Australia-United States Free Trade Agreement, US investors are also exempt from the restrictions if the property being acquired is valued at A$1,005 million. In addition, acquisitions through a will, probate or intestacy or by an order of court, as well as acquisitions obtained directly from the state, will be valid without the need for consent.


In general, commercial tenancy agreements may be privately negotiated and signed by the landlord and tenant and are valid so long as they adhere to existing contract law principles. State legislation, such as that in New South Wales, inserts various implied terms into leases, which may not have been put down in writing by the parties.

While there is no requirement that short-term leases be registered and even verbal agreements may be taken to amount to leases, for security’s sake such leases should be treated as deeds and drafted and executed accordingly.