What is a NICO Plan?
Land that is owned by a number of different people can be included in one plan of subdivision or consolidation. These types of plans are called “not in common ownership” plans. A NICO plan is most commonly used when there needs to be a change in boundaries between properties, such as when common property is to be incorporated into a lot.
As previously stated, a NICO plan is a plan of subdivision or consolidation by the owners of two or more titles held in different proprietorships. For example:
- Jeffrey Brown is the registered owner of 40 Property Street, Brown Hill, being the whole of the land contained in the certificate of title volume 1234 folio 567.
- Melissa Sully is the registered owner of 42 Property Street, Brown Hill, being the whole of the land contained in the certificate of title volume 8910 folio 112.
- Jeffrey and Melissa have agreed to alter the boundary between their properties, so that Jeffrey will be taking ownership of the parcel of land as shown on the plan below (“Subject Land”).
The only way that Jeffrey and Melissa can give effect to their proposed boundary realignment is to register a NICO plan at the Land Titles Office.
Effects of Registration of the NICO Plan
Upon registration of the NICO plan, the boundaries between Jeffrey and Melissa’s property will be altered. Two new titles will be created, one for Lot 1, which now includes Jeffrey’s land and the Subject Land and the other for Lot 2, which contains Melissa’s land minus the Subject Land.
The registration of the NICO plan will not change the ownership of the property. As such, the certificate of title for Lot 1 will be issued in the name of Jeffrey Brown as to the land formerly contained in the folio of the register volume 1234 folio 567 and Melissa Sully as to the land formerly contained in the folio of the register 8910 folio 112. Lot 2 will be issued in the name of Melissa Sully solely.
Transferring the Land
In order to remedy the ownership of Lot 1, it is necessary for a Transfer of Land to be registered at the Land Titles Office. Upon registration of the Transfer of Land, Jeffrey Brown will solely own Lot 1. It is important to note, that it is not possible to transfer the Subject Land separately as there is no separate title for it.
The transferors on the Transfer of Land must be the owners of Lot 1, being Jeffrey Brown and Melissa Sully. The transferee will be Jeffrey Brown.
The consideration for the Transfer of Land will vary depending on the circumstances. Sometimes, money will be paid for the transfer. If this is the case, then the amount paid for the transferred land will be the consideration for the Transfer of Land. However, in some cases, the land will be swapped, or the transferee is entitled to the parcel of land because they are the beneficial owner of the property. In these situations, the consideration is not a monetary consideration.
Whatever the situation is with the consideration, the Transfer of Land will need to be assessed for duty by the State Revenue Office. Once the State Revenue Office assesses the duty on the Transfer of Land and payment is made, then the Transfer of Land can be lodged for registration at the Land Titles Office. Once the Transfer of Land is registered, the title to Lot 1 will be issued in the name of Jeffrey Brown only.
Mortgages
Jeffrey Brown’s property is subject to a mortgage from the National Australia Bank. The certificate of title for Lot 1 was issued with the existing mortgage. However, this mortgage only applies to the land that was originally contained in volume 1234 folio 567 (mortgage as to part).
The National Australia Bank is unable to exercise its power of sale over the whole of Lot 1 based on the amended title. As such, the mortgagee will require that their existing mortgage be discharged and a new mortgage registered over the whole of Lot 1. In turn, the mortgagee now has the ability to exercise its power of sale, if required, over the whole of Jeffrey’s land.
For further information on NICO plans or plans of subdivision and consolidation generally, please contact us at property@ballaratlawyers.com.au or on 5303 0281.
For more information on our conveyancing arm, click here.
The information on this website is of a general nature only. It is not, nor is it intended to be, legal advice. You should consult a lawyer for individual advice about your particular circumstances.
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