This article was written by Grace Blake Solicitor at W & G Lawyers.
At W and G Lawyers, we are seeing a growing trend across Queensland, particularly on the Gold Coast, where local councils are increasingly targeting unapproved works and boundary issues during property transactions. Following discussions with Stewart Title, title insurance is worth considering as a risk management tool for buyers navigating this evolving landscape.
We have previously written about the general benefits of title insurance. This article focuses on a more recent and specific trend. Council enforcement activity across Queensland has increased sharply, and this has real consequences for buyers who may not have previously considered title insurance a priority.
What Is Title Insurance?
Title insurance is a one-off policy taken out at settlement that protects property buyers against a range of risks that may not be discoverable prior to purchase. Unlike most insurance products, there is no ongoing premium. You pay once and are covered for as long as you own the property.
These risks include unapproved structures, boundary encroachments, outstanding rates or levies, and other defects that may only come to light after you have already taken ownership. The premium is generally modest relative to the value of the property and the risks involved, and no excess is payable if you ever need to make a claim.
To put the cost in perspective, for a residential property purchased between $1,000,000 and $1,250,000, the one-off premium is $1,199.16. No excess is payable if you ever need to make a claim. You can calculate the premium for your specific purchase using Stewart Title’s online calculator.
What Title Insurance Adds to Your Solicitor’s Work
A reasonable question for any buyer to ask is: If my solicitor conducts searches and reviews disclosure before settlement, why do I need title insurance as well?
Your solicitor conducts extensive searches prior to settlement, including rates, land tax, body corporate certificates, and title searches. These searches are essential and reveal what is recorded on official registers at the time they are conducted. However, they have inherent limitations:
- They rely on the accuracy and completeness of information provided by councils, authorities, and bodies corporate.
- They do not capture hidden liabilities that emerge after settlement but relate to the period before you took ownership.
- They cannot identify matters that are not yet recorded on any register (for example, a special levy raised in principle by a body corporate but not yet formally “struck”).
- They cannot return information that was never lodged in the first place, such as works carried out without council approval.
Title insurance is designed to respond where these searches fall short. It is not a replacement for proper legal due diligence, but an additional layer of protection against risks that careful searching cannot always uncover.
Increased Enforcement Activity in Queensland
Local councils, particularly on the Gold Coast, are adopting more proactive compliance strategies. In an effort to avoid increasing rates, councils are turning to alternative revenue raising methods. These include identifying unapproved structures, investigating boundary encroachments, and deploying aerial technology such as drones to detect discrepancies.
These issues are often uncovered during the conveyancing process or shortly after settlement, leaving buyers exposed to unexpected liabilities at a time when they have already committed to the purchase.
The Most Common Title Insurance Claims
In practice, the most common claims arise from two key areas: boundary and encroachment issues, and unapproved works.
Boundary disputes can occur where structures such as fences, driveways or buildings extend beyond legal boundaries. These issues are often not apparent without a formal survey and may remain undiscovered until enforcement action is taken.
Unapproved works present a separate but equally significant risk. Extensions, decks, pools and renovations may not have received the necessary council approvals, and when identified, can result in demolition orders, costly rectification works and financial penalties.
A common question is why unapproved works are not captured by a standard building and pest report or a council search. The answer lies in what each tool is designed to do:
- Building and pest reports assess the physical condition of a property, including structural integrity, defects, and termite activity, but they do not verify whether council approval was obtained for any structure.
- Council building records searches only reveal approvals that are on file. Unapproved works, by definition, were never lodged and therefore do not appear in those records. An unapproved deck, shed or extension is generally only detected when council actively investigates.
- Your solicitor reviews the available searches and flags anomalies, but no search can return information that was never registered in the first place.
This gap between “what is on the record” and “what physically exists on the property” is exactly where title insurance responds.
REAL-WORLD SCENARIO
A buyer settles on a Gold Coast property and moves in without issue. Six months later, they receive a council compliance notice regarding a deck added by the previous owner, built without approval and not disclosed in the contract. Without title insurance, the buyer faces thousands of dollars in rectification costs or potential demolition. With a policy in place, those costs may be covered under the terms of the policy.
Limitations of Seller Disclosure
While Seller Disclosure Statements are designed to promote transparency, they have inherent limitations. Unless a purchaser engages a registered surveyor or quantity surveyor to verify boundary lines and improvements, there remains a real risk that encroachments will go undetected, that improvements are non-compliant, or that historical defects are not disclosed.
Even with careful legal due diligence, some risks are simply not discoverable prior to settlement. Title insurance provides an additional layer of protection against these unknown risks.
Strata Properties and Additional Exposure
Purchasing a strata property introduces an added layer of complexity. Strata owners may also be exposed to enforcement orders affecting structures within their lot, such as non-compliant renovations carried out by previous owners, which may require rectification or removal.
As with rates and land tax, your solicitor will obtain a body corporate certificate and review the disclosed liabilities prior to settlement. However, the certificate discloses only what the body corporate has formally recorded at a point in time. Errors in the certificate, historical liabilities not yet raised, or special levies raised but not yet struck may only surface after settlement. In many cases, these issues appear after the buyer has already taken ownership, at which point the purchaser bears the financial consequences. Title insurance is designed to respond to these undisclosed or incorrectly disclosed liabilities.
Key Features of Title Insurance
Policies offered by providers such as Stewart Title include:
- One-off premium paid at settlement
- No excess payable on claims
- Unlimited claims for covered risks
- Coverage for the entire period of ownership
- Policy benefits that transfer to beneficiaries under a will
- In some cases, coverage for certain known unapproved works
Most buyers arrange title insurance at settlement so the premium can be included in settlement adjustments. Policies can generally also be arranged after settlement, although terms may differ and any issues that have come to light between settlement and the application date may be excluded from cover. Buyers considering a post-settlement policy should confirm current availability and terms directly with the insurer.
How to Proceed If You Wish to Obtain Title Insurance
If you are considering title insurance for your purchase, the process is straightforward:
- Review the policy terms and coverage directly with Stewart Title. Their consumer brochures are available on their website.
- Calculate the one-off premium for your specific purchase price using the insurer’s online premium calculator.
- Make your own enquiries with the insurer if you have any questions about what the policy does and does not cover.
- Notify our office of your decision prior to settlement, ideally at least 7 to 10 business days in advance.
- We will arrange for the application to be submitted and the premium included in your settlement adjustments, so the policy is in place from the settlement date.
How W & G Lawyers Can Help
At W & G Lawyers, we can explain how title insurance operates in the context of your conveyancing matter and, if you elect to proceed, arrange for the policy to be put in place at settlement with the premium included as part of your settlement adjustments. This makes the process seamless and efficient.
We do not provide financial or insurance advice. We encourage you to review the policy terms, consider the product disclosure material, and make your own enquiries with the insurer to determine whether the cover suits your circumstances.
Speak with our conveyancing team before your next settlement. It is a small step that could save you significantly down the track.
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This article is general information only and does not constitute legal advice under Australian law. For advice specific to your situation, please contact W & G Lawyers. For further details, please click here to view our disclaimer.