What Are Encumbrances and Why Do They Matter When Selling Land?
If you're selling land in Queensland, you're legally required to disclose any encumbrances on the property, including those that might not appear on the title.
But what exactly is an encumbrance, and how does it affect your sale?
Whether you're exchanging a small vacant block or a large rural property, understanding your disclosure obligations is essential if you want to avoid legal complications and keep your sale on track.
What is an encumbrance?
In plain terms, an encumbrance is any right or interest in the land held by someone other than the property owner. It might restrict how the land can be used or affect its value. Some encumbrances are registered on the title, while others might not be, but that doesn't mean they can be ignored.
Common examples of encumbrances include:
- Easements (e.g. access for neighbours or utilities)
- Drainage pipes or water infrastructure
- Rights of way or shared driveways
- Unregistered services like power lines or underground cables
These can affect a buyer's ability to develop or use the land freely. They need to know what they’re buying into so they can plan accordingly.
Where are encumbrances disclosed?
If you're using a standard REIQ contract (which most sellers in Queensland do), there’s a specific section for disclosing encumbrances. This section must be filled out clearly and accurately.
It might be tempting to skip over items you think are minor or not really your problem, but failing to disclose encumbrances can derail a sale or even lead to legal action. Buyers who later discover undisclosed information could have grounds to terminate the contract or claim compensation.
Why disclosure matters
Property buyers make decisions based on the information they’re given. If a drainage easement limits where a buyer can build or a neighbour’s right of way crosses the block, they deserve to know before they commit to the exchange.
Disclosing encumbrances is a legal obligation, but it benefits you as the seller because it means you will save yourself from the risk of legal disputes down the track.
Caveat emptor won’t apply for much longer
Queensland still follows the principle of caveat emptor, or 'buyer beware'. That means buyers are expected to do their own due diligence. However, this will change with new property legislation being introduced from August 2025.
Under these changes, sellers must provide a completed and signed disclosure statement that includes information about defects or encumbrances before the buyer signs the contract.
How to identify encumbrances
Not all encumbrances are obvious, especially if they’re not listed on the title. Here are some practical steps to help identify what you might need to disclose:
- Order a title search: This will show registered easements and restrictions.
- Check with Council: Local authorities may hold records of planning overlays or infrastructure not on the title.
- Use Dial Before You Dig: This free service can reveal underground services that might affect the property.
- Get legal advice: A property lawyer can review your contract and help uncover hidden encumbrances.
It pays to be thorough
Selling land without disclosing an encumbrance can have serious consequences, especially if the encumbrance impacts the value of the property. The safest approach is to assume disclosure is better than omission.
If in doubt, disclose it!
Selling land in Queensland: NPR Law can help
If you have any questions or would like us to assist you with a property disclosure that includes encumbrances, please call us on 07 3555 6333 or contact us here.
We're based in Caboolture and proudly service nearby areas throughout Moreton Bay.