A property title serves as a comprehensive record detailing vital aspects of a property, including its type (e.g., freehold, leasehold, cross lease, unit title), size, boundaries, and registered rights and restrictions. Whether it’s a purchase, sale, mortgage, or refinance transaction, initiating with a title search is paramount.

For property buyers, examining the title is crucial for understanding the property’s attributes and potential limitations. Various rights and restrictions are commonly registered on New Zealand property titles, such as:

Mortgages:

These secure borrowing against the property and require discharge upon land sale.

Consent Notices:

Issued under the Resource Management Act 1991 to ensure compliance with council requirements, impacting land use plans.

Easements:

Rights to use another’s land, like driveways or utility access, with attached terms and conditions necessitating careful scrutiny.

Land Covenants:

Obligations dictating specific actions or restrictions on property use, often employed by developers to maintain subdivision aesthetics.

Fencing Covenants:

Prevent neighboring owners from sharing fence costs under the Fencing Act 1978.

Identifying any concerning rights or restrictions on a property title before purchase is essential. The presence of undisclosed issues could lead to inconvenience or unfair outcomes post-purchase. Ensuring a clear title status can be achieved by conducting a thorough title check before entering into a buying contract or by making the contract conditional upon title approval.

While commonly used sale and purchase contracts may lack a specific title approval condition, they often include a requisitions clause. However, this clause only permits objections to title defects, limiting its effectiveness in addressing broader concerns. Thus, buyers are advised to pursue independent title checks or include special contract conditions for title approval.

In auction scenarios, where title approval clauses may be absent, it’s imperative to conduct meticulous title inspections beforehand to avoid post-purchase complications.

In summary, checking a property’s title before purchase is indispensable for buyers, enabling them to make informed decisions and mitigate potential risks associated with undisclosed title issues.