Common Issues Found in Title Searches
When purchasing property in New Zealand, conducting a thorough title search is essential to ensure there are no hidden surprises that could affect your ownership or use of the property. A title search reveals the legal status of the property and any rights or restrictions associated with it. This article delves into common issues found in title searches and provides guidance on how to address them effectively.
1. Unregistered Easements
An easement grants someone else the right to use a portion of the property for a specific purpose, such as access or utility services. Unregistered easements can be problematic as they may not appear in the initial title search but can still affect the property.
How to Address It:
- Conduct Thorough Searches: Ensure all easements are registered by conducting comprehensive title and survey plan searches. Land Information New Zealand (LINZ) provides detailed records that can be accessed online.
- Legal Advice: Consult with a property lawyer to verify the existence and implications of any easements. They can help negotiate with the seller to resolve any unregistered easements before purchase.
2. Restrictive Covenants
Covenants are rules that the property owner must abide by, such as restrictions on building materials, property use, or activities on the land. These can significantly impact your plans for the property.
How to Address It:
- Review the Title Thoroughly: Carefully review the title for any covenants. The Real Estate Authority recommends that licensees be familiar with and able to explain any covenants to potential buyers.
- Professional Guidance: Seek advice from a lawyer to understand the full implications of any covenants and ensure they align with your intended use of the property.
3. Caveats
A caveat is a notice that someone other than the legal owner claims an interest in the property. This can prevent the property from being sold or mortgaged until the claim is resolved.
How to Address It:
- Investigate the Caveat: Determine the nature of the caveat and the party claiming the interest. LINZ provides resources for understanding caveats and their implications.
- Legal Resolution: Work with your lawyer to resolve the caveat. This may involve negotiating with the claimant or seeking a court order to remove the caveat if it is unjustified.
4. Boundary Disputes
Boundary issues can arise when the physical boundaries of the property do not match the legal description in the title. This can lead to disputes with neighbouring property owners.
How to Address It:
- Professional Survey: Hire a licensed surveyor to verify the property boundaries. A survey plan from LINZ can provide detailed information about the property’s boundaries and dimensions.
- Clear Communication: Discuss any discrepancies with the seller and neighbouring property owners to resolve boundary issues before finalising the purchase.
5. Outstanding Mortgages
Mortgages registered against the property must be discharged before the property can be transferred to the new owner. An outstanding mortgage can delay the settlement process.
How to Address It:
- Title Check: Ensure the title search includes information about any registered mortgages. The Auckland District Law Society advises that all mortgages should be discharged by the seller before settlement.
- Settlement Condition: Include a condition in the sale and purchase agreement requiring the seller to discharge any mortgages before settlement.
6. Consent Notices
Consent notices are issued under the Resource Management Act 1991 and can impose specific requirements on the property, such as building restrictions or environmental protections.
How to Address It:
- Review Consent Notices: Carefully review any consent notices attached to the property title. These notices are legally binding and must be adhered to by all future property owners.
- Consult Experts: Seek advice from a town planner or environmental consultant to understand the implications of the consent notices on your intended use of the property.
7. Historical Title Issues
Historical issues, such as unresolved ownership claims or past legal disputes, can complicate the title. These issues may not be immediately apparent in a standard title search.
How to Address It:
- Historical Title Search: Conduct a historical title search to uncover any past issues that may affect the property. LINZ offers access to historic titles, which can provide valuable insights into the property’s history.
- Legal Review: Have your lawyer review the historical title information to identify any potential issues and advise on how to resolve them.
Conducting a thorough title search is a critical step in the property purchase process in New Zealand. By identifying and addressing common issues such as unregistered easements, restrictive covenants, caveats, boundary disputes, outstanding mortgages, consent notices, and historical title issues, you can ensure a smoother transaction and protect your investment.
Always seek professional advice from property lawyers, surveyors, and other experts to navigate the complexities of title searches. With careful planning and due diligence, you can confidently move forward with your property purchase and avoid unexpected complications.