Checking titles

It’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:

    ‘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.’

    ‘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 purchaser’s legal adviser.’

    ‘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.’

  • Do not solely rely on information provided by the vendor

    ‘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.

    ‘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.’

  • Related rules

    ‘We consider that our above views relate to Rule 5.1 of the Real Estate Act (Professional Conduct and Client Care) Rules 2009 which reads’:

    “5.1 A licensee must exercise skill, care, competence, and diligence at all times when carrying out real estate agency work.”

    ‘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.’

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