As part of the normal conveyancing process, the purchaser will make enquiries with the vendor about the Title of the property. These are referred to as “requisitions on title”.
The purpose of requisitions is to ask the vendor information which may not have been disclosed in the contract or discovered during an inspection of the property. The information can range from whether there is a dispute with the neighbour regarding fences, to whether there is any matter that could justify the making of a demolition order.
There are four categories of requisitions:
- Requisitions as to title – these are matters relating to the title of the property for sale, such as whether there is an easement affecting the property.
- Requisitions as to conveyance – these are matters relating to how the property will pass to the purchaser, such as the documents to be handed over at settlement. For example, the proper execution of documents to be handed over at settlement and the time and place for settlement.
- Requisitions in the nature of general enquiries – these are best described as things that are routinely asked and may include information on how matters are to be dealt with on completion. For example, adjustments to be made, documents to be handed over, or the existence of any statutory notices.
- Requisitions in the nature of reminders – these are as they sound, simply reminders to comply with the Contract. For example, any caveat on title must be removed before settlement, vacant possession must be provided on settlement, and so on.
Whilst a great deal of the information sought in Requisitions on Title are now covered in a vendor’s duty to disclose matters affecting the property, there are some areas that are not covered by this duty of disclosure. Given that purchasing property is probably one of the biggest decisions and investments a person will make in their lifetime it goes without saying that it is vitally important that as much information as possible is obtained about the property before settlement takes place.
The vendor is required to answer Requisitions on Title honestly and to the best of their knowledge. There are a range of remedies if this is not done, some of which can be quite severe.
A vendor who deliberately answers a requisition falsely is liable for damages for deceit if the false answer was intended to, and does, induce a purchaser to complete the purchase. This not only applies to the answers originally given but also to situations where the vendor unintentionally provides an incorrect answer, becomes aware that the answer is incorrect and does nothing to disclose the truth to the purchaser.
If a vendor or their practitioner intentionally conceals a matter that is material to the title of the property in order to induce the purchaser to settle, then they may both face criminal and civil charges (s183 Conveyancing Act 1919).
If the reply is honest but incorrect the vendor and possibly their practitioner may be liable for negligent misstatement.
Incorrect replies may also be found to be a breach of consumer protection legislation such as the Australian Consumer Law.
If a vendor is unable or unwilling to reply to a requisition the contract provides that the vendor may rescind the Contract but only if:
- the purchaser has made a proper requisition;
- the vendor is acting on reasonable grounds, not for ulterior purposes or out of recklessness.
Any notice of intention to rescind under this clause must give the purchaser a reasonable time to waive the requisition (s56 Conveyancing Act 1919).