Encumbrance (M2)

Section 128B of the Real Property Act 1886 (SA) provides that where land is to be charged with, or made security for, an annuity, rent charge or sum of money in favour of a person, an encumbrance in the appropriate form must be executed by the registered proprietor and that person. The encumbrance must describe the land by reference to its certificate of title (or otherwise identify it) and accurately state the estate or interest encumbered (s 129(1)). Form M2 is the approved form, prefix E for freehold or Crown leasehold land and E2 for a subsidiary interest such as a registered lease.

When you need it

• Land is to secure the payment of an annuity or rent charge, for example to a family member for life.
• Land is to be charged with the payment of a sum of money.
• The covenants are contained in a registered memorandum of standard terms and conditions.

1. 1

   Land and estate

   Describe the whole land ('Whole of the land in CT Volume ... Folio ...') or the affected portion by plan. For estate and interest insert 'FEE SIMPLE', 'CROWN LESSEE' or, for example, 'Lessee under and by virtue of Memorandum of Lease No ...'.

2. 2

   Parties

   Give the encumbrancer's full name and current address, and the encumbrancee's full name, address and mode of holding.

3. 3

   Operative clause

   Insert the amount at (a), the term at (b) (for life, 'during his or her lifetime') and the payment times at (c). If the encumbrance secures a sum of money, strike through 'an annuity or rent charge' and substitute 'the sum of money'.

4. 4

   Covenants

   If the covenants are set out only in the encumbrance, strike through the memorandum wording. If they are in a memorandum of standard terms, with or without changes, strike through 'herein' and insert the memorandum number. Special covenants go on page 2.

5. 5

   Date and certification

   Date the form and complete the certification panels for the encumbrancer and the encumbrancee.

• Encumbrances executed on or after 3 August 2020 must be lodged electronically through an Electronic Lodgement Network Operator, unless an exemption applies, such as encumbering part of the land in a title or multiple encumbrancees represented by separate subscribers.
• Paper encumbrances that fall within an exemption, or are lodged by self-represented parties, are lodged at Land Services SA, Level 9, 101 Grenfell Street, Adelaide.
• A registration fee applies; check Land Services SA's current fees page.

• If the encumbrancer's name has changed, lodge an Application to Note Change/Correction of Name before the encumbrance.
• The encumbrance is subject to any prior registered interests, such as a mortgage, lease, permissive caveat or earlier encumbrance.
• When the annuitant dies or the event ending the annuity occurs and arrears are paid, the Registrar-General can note the annuity as satisfied and cancel the encumbrance (s 145).