What Are Encumbrances on a QLD Property Title?

Quick answer: An encumbrance is any right or interest someone else holds over a property – an easement, covenant, mortgage or statutory charge. An easement is the most common type: a right for someone to use part of another person’s land for a set purpose, like a driveway, drain or power lines. In Queensland, sellers must disclose all title encumbrances that survive settlement, and failing to do so can let the buyer terminate right up until settlement.

In this blog/video we discuss encumbrances in Queensland property, and how they can hijack a property sale!

We discuss how missing an encumbrance can allow the buyer to terminate, we explore how to find encumbrances and then what to do to protect the transaction, and more…

Prefer to watch/listen? Click here to consume this content via YouTube!

Hi everybody – George Sourris, Empire Legal.

Today’s topic: The Shocking Truth About Encumbrances in Queensland Property Deals!

What is an encumbrance on a Queensland property title?

 When selling real estate in Queensland, it’s crucial to disclose ALL encumbrances affecting the property to the buyer BEFORE they sign a contract.

Registered encumbrances: what shows up on a title search

For a section-by-section walk through the search itself, including the four things people wrongly assume are missing from it, see what a title search shows and misses.

Some encumbrances are easy to identify because they appear on the property’s title, such as registered encumbrances, or covenants. An example of this could be a driveway or stormwater easement registered on title that affects the property.

Unregistered encumbrances: the ones that never appear on title

However, not all encumbrances appear on title. These encumbrances are known as unregistered title encumbrances. They must also be disclosed to the buyer. A common example of an unregistered title encumbrance is a statutory easement granted to utility providers, for essential services, like water, electricity, stormwater, drainage, internet and telecommunications.

What the REIQ contract makes a seller disclose

The current Queensland REIQ Contract for Houses and Residential Land highlights the seller’s obligation to disclose matters under the section titled: Matters Affecting the Property. This section specifically instructs sellers to disclose-  all title encumbrances which will remain after settlement,  for example easements on the title, and statutory easements for sewerage and drainage,  which may not appear on the title.   Failure to disclose unregistered title encumbrances can have serious consequences.

The buyer will likely have the right to terminate the contract at any time before settlement, even if it’s otherwise “unconditional”. This is noted specifically in Standard Term 7.7 of REIQ contracts. The buyer may also seek damages, including costs.

Why a catch-all clause will not protect the seller

Some real estate agents attempt to cover these encumbrances by inserting broad catch all clauses in contracts, such as: “all statutory easements or encumbrances or rights for water, sewerage, drainage or other utilities”.

However, this general wording blanket statement is not sufficient, and will almost certainly leave the seller vulnerable with legal consequences. If you look on page 3 of the REIQ contracts, right next to the matters affecting the property section, you’ll see a little disclaimer that reads:

“WARNING TO SELLER – you are required to disclose all title encumbrances which will remain after settlement, for example, easements on title in favor of other land and statutory easements for sewerage and drainage which may not appear on a title search. Failure to disclose may entitle the buyer to terminate the contract or to compensation. It is not sufficient to state, refer to title, searches will reveal or similar”.

If you haven’t seen that little section, you should give it a read!

How to find every encumbrance before you list

Therefore, guys, to ensure full disclosure of any unregistered title encumbrances, sellers should go beyond a standard title search and conduct a free dial before you dig search. This will help identify the exact location of any underground services that may be subject to statutory easements.

Third party town planning reports are also available, like a Propcheck or a Develo.  At Empire Legal, we use Propcheck reports.  If it is available in the local council our clients are purchasing, we order a PropCheck (valued at $49) and give it to our clients for free as part of our service. This allows the clients to see any easements or encumbrances that may affect the property.

The PropCheck is a comprehensive report, offering flooding advice, heritage, koala habitats,  fire risk, noise corridors, odour corridors, etc. We suggest you click the link above if you want to find out more about either service.

How to describe an encumbrance on the contract

If any easements or encumbrances are found, the seller must mark “yes” on page 3 of the contract where it asks: “title encumbrances – is the property sold subject to any encumbrances”.

The encumbrance should be then clearly described. For example: “sewer main traversing the property, see attached asset map titled Annexure A”. Then, a copy of the search with a plan highlighting the encumbrance should be attached to the contract, with all parties signing it as part of the agreement.

That way, it’s unambiguous as to the particular encumbrance we’re talking about, and the buyer can’t later claim they didn’t know it existed.  By being compliant and disclosing any encumbrances that might affect the property, a buyer is informed as to exactly what they are buying. This transparency safeguards the purchase, as the buyer is purchasing the property with the knowledge of the encumbrance.

What happens if you fail to disclose an encumbrance

While some items are considered “buyer beware” in Queensland, encumbrances are required to be disclosed. Failure to disclose can allow a buyer to terminate right up until settlement.

Well guys, I hope you learned a thing or two about disclosing encumbrances for Queensland property contracts today. Keep in mind, we have a huge overhaul of the Property Law Act coming into effect on the 1st of August 2025.

This will change the way disclosure happens in Queensland, similar to the southern states. If you haven’t already checked it out, I’ve done a blog on this new Disclosure Regime and the new Form 2, which is a 7 page form that’s required as that 1st of August.

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A QCAT tree order works the same way and catches sellers who have never thought of it as an encumbrance at all. If the land is affected by a tree application or order, you must give the buyer a copy before they sign, or they can terminate right up to settlement. We have set out how to search the register and what the disclosure rules require in our guide to tree disputes in Queensland.

Frequently asked questions about easements and encumbrances in QLD

What does an easement mean on a property?

It means someone else has a legal right to use a defined part of your land for a specific purpose, such as access, drainage or utilities, even though you own the land. The land that benefits is the dominant tenement; the land that carries the burden is the servient tenement.

Can you build over an easement in Queensland?

Generally no – not without permission from whoever benefits from the easement, which is often a council or utility. Building over one can force you to remove the structure at your own cost.

Does an easement lower property value?

Sometimes, but not always. A minor drainage easement along a boundary usually has little effect, while an easement across a prime building area can genuinely limit what you can do with the land.

Can an easement be removed?

Occasionally – by agreement between the parties or by court order – but it’s not simple and it isn’t guaranteed. Get advice before assuming an easement can be cleared.

Do easements have to be disclosed to a buyer in Queensland?

Yes. Sellers must disclose all title encumbrances that remain after settlement, including registered easements and statutory easements for sewerage and drainage that may not appear on a title search. Failure to disclose can entitle the buyer to terminate or claim compensation.

Worried about an encumbrance you did not know about? Unregistered easements, covenants and charges that were already on the title when you bought are among the risks a title insurance policy in Queensland can respond to. It is a one-off premium and it does not replace proper searches, but it is worth knowing the option exists.