There is an encumbrance or covenant over your property in favour of a deregistered company

ASIC may - but is not obliged to - provide consent within the terms of an encumbrance or discharge an expired encumbrance registered in the name of a deregistered company.

What is an encumbrance?

An encumbrance (sometimes called a covenant or restrictive covenant) can be registered against land, placing restrictions and conditions on how a property owner can deal with the property. Restrictions may include things such as a limit on the height of buildings (to protect views of others in the area), the type of fence that can be built (to maintain the style in the area), etc. Encumbrances are often registered by a developer over the property prior to the property’s sale as part of a wider development.

What will ASIC do/not do in relation to an encumbrance?

Generally ASIC may approve applications to:

1. Consent to the lodgement of a plan of subdivision

ASIC may consider consenting to a lodgement of a plan of subdivision so that a property owner can subdivide the property that is subject to an encumbrance. However, applicants should note the following:

  • ASIC may not always exercise its discretion to provide the consent.
  • If the encumbrance strictly forbids subdivision, ASIC cannot alter the terms of the encumbrance and will not consent to a subdivision (see alternative remedies you must try before you apply to ASIC below, specifically court application).
  • If the encumbrance is over property in South Australia and does not include a specific clause that subdivision is allowed with the encumbrancee's consent, then you may be eligible for dispensation from the Registrar-General and ASIC's consent may not be required (see alternative remedies you must try before you apply to ASIC below, specifically Request to land titles office to dispense with consent).
  • In considering whether to consent to a lodgement of subdivision, ASIC does not assess the town planning or development grounds, which are the responsibility of the relevant authorities in the development application process.
  • If ASIC consents to a subdivision then the encumbrance will extend over the newly created title.

2. Give consent within the terms of the encumbrance

ASIC may consider consenting to proposed work being carried out on the property if it is allowed under the encumbrance. In some cases, even though the proposed work would not breach the restrictions of the encumbrance, it may still require the written consent of ASIC as the successor of the deregistered company. For example, an encumbrance may permit the erection of a fence of a particular construction, but still require the consent of the encumbrancee before construction can commence.

ASIC’s consideration of such matters will be on a case-by-case basis and ASIC may not exercise its discretion to provide consent. In these cases, you should contact ASIC’s Property Law Group on (providing a recent land title search and a copy of the encumbrance) and outline what you would be seeking ASIC's consent to do before lodging an application with ASIC.

3. Discharge an expired encumbrance

The terms and conditions of an encumbrance may no longer apply once the time period stated in the encumbrance has expired. Property owners may wish to have expired encumbrances discharged so that the certificate of title for the property is clear for prospective purchasers during a sale process (see alternative remedies you must try before you apply to ASIC below, specifically Request to land titles office directly to remove expired encumbrance).

Applicants should note that the expiration date of the encumbrance must be clear and unambiguous.

ASIC does not approve applications to:

  1. discharge encumbrances which have not expired or
  2. vary the terms of encumbrances.   

In such cases, you need to consider applying to the court for relief. Further information about your options can be sought from your legal advisor.

Alternative remedies you must try before you apply to ASIC

ASIC exercises its discretionary powers under the Act as a last resort. Before you apply to ASIC you need to satisfy ASIC that the following alternative remedies are not available to you.

Request to land titles office to dispense with consent

ASIC understands that in certain cases the Registrar-General of Land Services South Australia may be prepared to dispense with the requirement for consent from ASIC on behalf of deregistered encumbrancees. Such dispensation is unlikely to be granted if the encumbrance specifically includes a clause that requires the encumbrancee's consent for subdivision. Before you proceed any further you must check the specific wording of the encumbrance over your property.

ASIC refers you to Notice to Lodging Parties 171 (which outlines the Registrar-General's guidelines for granting the dispensation) and Notice to Lodging Parties 162 (which outlines how to apply for dispensation). You should contact Land Services directly if you have any questions in relation to obtaining dispensation.

Should you be granted dispensation by the Registrar-General, you will not need to proceed with an application to ASIC. However if you are not eligible for dispensation by the Registrar-General then you will need to proceed with an application for ASIC to execute the relevant consent on the company's behalf. See How to apply to ASIC for consent/a discharge.

Request to land titles office directly to remove expired encumbrance

If the encumbrance has expired you need to contact the relevant state/territory land titles office to inquire whether you can apply to them directly for the removal of encumbrance.

How to apply to ASIC for consent/a discharge?

The application requirements will depend on whether you are applying for consent or a discharge.

If you require ASIC to provide consent under an encumbrance as you are unable to obtain dispensation from the land titles office, use this Checklist to prepare, and then submit, your application to ASIC: Download PDF Checklist – Consent Under Encumbrance (PDF 740 KB)

You will also need to complete this indemnity: Consent Under Encumbrance.

If you require ASIC to execute a discharge of the expired encumbrance, as the land titles office will not remove the expired encumbrance without ASIC's execution of a Discharge, use this Checklist to prepare, and then submit, your application to ASIC: Download PDF Checklist – Discharge Expired Encumbrance (PDF 305 KB)

You will also need to complete this indemnity: Discharge Expired Encumbrance

Instructions for submitting your application are contained in the relevant Checklist.

How long will it take to assess your application

ASIC usually makes a decision within 60 days of receipt of all requested materials. You need to take this timeframe into account and if necessary, re-schedule any transactions (e.g. settlement dates) to include this 60 day period. Delays occur when incomplete applications are submitted.

Please allow at least 30 days before enquiring about the progress of your application.

Urgent applications

In certain situations, ASIC may consider applications on an urgent basis (i.e. within a specific and short timeframe). However, ASIC will only do so in exceptional circumstances because this would give the urgent application priority over other applications lodged in a more timely manner.

Applicants must therefore clearly demonstrate that the urgency results from factors beyond their reasonable control that they could not have reasonably foreseen. Settlement of a contract of sale is not a sufficient basis for urgent consideration.

Do you need legal representation

While ASIC receives many satisfactory applications from applicants directly, you may wish to consider seeking independent legal advice. ASIC is only able to provide you with guidelines on how to make the application.

More about the effect of deregistration

More about applications to ASIC to deal with deregistered company property

This is only a general guide as to ASIC's approach to the property and rights that pass to ASIC and the Commonwealth on deregistration of a company. This document does not represent legal advice and should not be interpreted as such. Each application or enquiry will be considered on its facts and decided on its individual merits, based on all the information available to ASIC at the time. We encourage you to seek your own professional advice to find out how the law applying to deregistered companies affects your individual circumstances.

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Last updated: 24/01/2013 12:00