Checking titles

Itā€™s important you check and understand the title when listing a property as a licensee. This page outlines your obligations when checking a title and includes relevant guidance from a Real Estate Agents Disciplinary Tribunal decision.

Key parts of the decision

  • You should search the title and be familiar with it

    The decision stated the following:

    ā€˜We consider that a licensee, upon taking instructions for the sale of a property, should search its title, or have some competent person search it for the licensee, and be familiar with the information gained from such a search.ā€™

    ā€˜In this case, it would have also been necessary to search the content of a transfer shown as containing a restrictive covenant. Such a search is not a difficult task to carry out or arrange. Similarly, the licensee should ascertain such matters as zoning and compliance with town planning regulations or Council requirements. We do not accept that a licensee can simply regard such matters as within the realm of a vendor or purchaserā€™s legal adviser.ā€™

    ā€˜Licensees should be familiar with and able to explain clearly and simply the effect of any covenants or restrictions which might affect the rights of a purchaser. This is so whether that purchaser is bidding at auctions or negotiating a private treaty.ā€™

  • Do not solely rely on information provided by the vendor

    ā€˜We observe that acting merely as a conduit from seller to purchaser may not exonerate a licensee from blame. We do not think that a licensee should place sole reliance and credence on advice or assurances from a vendor, even though given in good faith.

    ā€˜It seems to us to be fundamental to effect such a search [meaning a title search] in order to ensure that the apparent vendor actually has title to the property.ā€™

  • Related rules

    ā€˜We consider that our above views relate to Rule 5.1 of the Real Estate Act (Professional Conduct and Client Care) Rules 2009 which readsā€™:

    ā€œ5.1 A licensee must exercise skill, care, competence, and diligence at all times when carrying out real estate agency work.ā€

    ā€˜We emphasise that our above views about understanding the state of the title of the subject property is an essential role for a licensee, and failure to undertake such a title check could well amount to unsatisfactory conduct under s.72 or even the more serious offence of misconduct under s.73.ā€™

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