When you're buying a property in New Zealand, your real estate agent or lawyer might suggest making your offer "subject to title search." It's one of the most common conditions in sale and purchase agreements — and for good reason. A title search condition could save you from buying a property with hidden problems that cost thousands to resolve.
This guide explains exactly what "subject to title search" means, why it matters, what the condition should cover, and how to use it to protect yourself during a property purchase in New Zealand.
What Does "Subject to Title Search" Actually Mean?
A "subject to" condition in a sale and purchase agreement means the purchase is not final until that condition is satisfied or waived. When you make your offer subject to a title search, you're saying:
"I will only proceed with this purchase if I'm satisfied with what the property title reveals."
This gives you time — usually 5 to 10 working days — to obtain and review the property title before you're legally committed to the purchase. If the title reveals something unacceptable, you can cancel the contract and get your deposit back.
Without this condition, you're buying the property regardless of what the title shows. That could mean inheriting someone else's mortgage, being bound by restrictive covenants you didn't know about, or discovering that a right of way allows the neighbour to drive across your front lawn.
Why You Should Always Include a Title Search Condition
Some buyers — especially in competitive markets — are tempted to remove conditions to make their offer more attractive. Don't. Here's why a title search condition is non-negotiable:
You Could Inherit Problems
The property title records everything registered against the land: mortgages, easements, covenants, caveats, and more. Without checking, you could be buying into restrictions you didn't agree to.
It's Your Only Protection Period
Once settlement happens, problems with the title become your problems. A title search condition gives you a legal exit if something unacceptable surfaces.
The Cost Is Minimal
A Record of Title with Diagram costs just $42.90 — a tiny fraction of the hundreds of thousands you're spending on the property.
Your Bank May Require It
Most lenders want to see a current title before approving your mortgage. If you skip the title search and later find your bank won't lend against the property, you could lose your deposit.
What a Title Search Condition Should Cover
A well-drafted "subject to title search" condition should address more than just ownership. Here's what yours should verify:
1. Ownership Confirmed
Check that the seller is the registered owner and that the name on the title matches the name on the sale and purchase agreement. Discrepancies could indicate fraud, a deceased estate, or a trust structure that complicates the sale.
2. No Unexpected Easements
Easements grant others the right to use part of your property. Common easements include rights of way (shared driveways), drainage easements, and utility access. Some easements are minor; others can significantly restrict how you use the land. A Guaranteed Search at $45.90 provides the official search statement that confirms all registered easements.
3. Covenants That Restrict Use
Covenants are rules registered on the title that dictate what you can and can't do with the property. Building covenants might restrict the height, colour, or style of any structure you build. Land use covenants might prevent you from running a business from home or subdividing the section.
4. Mortgages to Be Discharged
If the seller has a mortgage, it must be discharged (removed from the title) at settlement. Your title search should confirm the mortgage exists and that arrangements are in place for its discharge.
5. Caveats or Notices
A caveat prevents the property from being dealt with — essentially freezing the title until the caveat is resolved. If there's a caveat on the title, you need to understand why and whether it can be removed before settlement.
6. Consent Notices Under Section 221 of the RMA
Consent notices are conditions imposed by council when subdivision consent was granted. They might require ongoing maintenance of stormwater systems, limit building sites, or require fencing. These run with the land and bind future owners — including you.
7. Designations for Public Works
A designation means a government authority has earmarked the property (or part of it) for a public work, such as a road widening. This could mean compulsory acquisition in the future.
How to Draft the Condition in Your Sale and Purchase Agreement
The standard Auckland District Law Society (ADLS) agreement includes a default title search condition, but you can strengthen it. Here's what to specify:
Timeframe
5 to 10 working days is standard. In a hot market, 5 working days may be more attractive. For complex titles, 10 working days gives your lawyer time to investigate issues.
Scope
The condition should allow you to satisfy yourself on "all matters arising from the title search" — not just ownership, but easements, covenants, caveats, and other registered interests.
What Constitutes Satisfaction
You can't cancel simply because you changed your mind. The reason for cancelling must be reasonably connected to something found on the title. "Not satisfied" means a genuine, title-related concern.
Your Lawyer's Role
Always have your lawyer review the title. They'll spot issues that a layperson might miss and can advise whether a condition is deal-breaking or manageable.
What Happens If the Title Reveals a Problem
Finding an issue on the title doesn't automatically mean you should walk away. Here's how to handle common scenarios:
Minor Easements
A drainage easement along the boundary is usually acceptable. Ask your lawyer whether it affects your intended use of the property.
Restrictive Covenants
If a covenant prevents you from building a second dwelling, and that was part of your plan, you may want to cancel. Alternatively, you could seek a variation or apply to the Environment Court to have it removed.
Caveats
A caveat may be legitimate (a builder owed money) or vexatious. Your lawyer can advise on whether it can be removed before settlement.
Mortgages
This is standard. The seller's solicitor arranges discharge at settlement. Confirm this is happening.
Outstanding Consent Notices
Understand what they require. Most are routine (stormwater maintenance), but some can be burdensome.
If the issue is manageable, you might proceed. If it's a deal-breaker, you invoke the condition and cancel the contract. Your deposit is refunded.
Common Mistakes Buyers Make with Title Conditions
Removing the Condition to Strengthen Their Offer
In a competitive market, some buyers remove conditions to make their offer more appealing. This is risky. A Pre-Purchase Diligence Package at $189.90 covers all the essential searches, but you need the time and legal right to review them.
Not Checking for Encumbrances
An encumbrance is a catch-all term for anything registered against the title. Buyers who only check ownership miss easements, covenants, and caveats that could cost them later.
Assuming the Title Is Clean Because the Agent Said So
Real estate agents work for the seller. Always conduct your own title search through an independent provider.
Not Understanding What They're Reading
A title document is full of legal terminology. Having your lawyer explain each entry ensures you understand exactly what you're buying into.
How to Order a Title Search Quickly
If your condition window is tight, you need results fast. Here's how:
- Order a Record of Title ($42.90) — This shows current ownership, all registered easements, covenants, mortgages, and other interests.
- If you need certainty, order a Guaranteed Search ($45.90) — This provides an official guarantee from the land registration system that the search results are accurate as of a specific date and time.
- For properties with complex histories, consider the Pre-Purchase Diligence Package ($189.90) — This bundles multiple searches including historical titles, survey plans, and instruments.
- If the property has a complex boundary or you're planning building work, add Survey Plans ($49.90) — These show the exact boundaries and dimensions of the site.
- Ownership verification — Does the seller's name match?
- Encumbrances — What's registered against the property?
- Easements — Are they acceptable for your intended use?
- Covenants — Do they restrict your plans?
- Mortgages — Will they be discharged at settlement?
- Caveats — Are there any that could prevent transfer?
- Consent notices — What ongoing obligations exist?
- Instrument references — Are there documents you need to inspect? Order Instruments ($39.90) for the full text.
Orders through Certificate of Title NZ are typically processed within hours, giving you time to review the results within your conditional period.
What Your Lawyer Will Look For
When your lawyer reviews the title, they'll check:
The Bottom Line
"Subject to title search" is your safety net. It costs almost nothing to include, gives you legal protection, and could save you from the most expensive mistake of your life. Never remove it to make your offer more attractive. The $42.90 you spend on a title search could save you tens of thousands — or more — in problems you'd otherwise inherit.
If you're about to make an offer on a property, order your title search before you sign. Having the results ready means you can make an informed offer from the start — or walk away before you're locked in.
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Frequently Asked Questions
Can a seller refuse a title search condition?
No. A seller can reject your offer entirely, but they can't force you to remove a title search condition. If they reject the condition, that's a red flag — it may mean they know the title has problems they don't want you to discover.
How long does a title search condition give me?
Most agreements specify 5 to 10 working days. This gives your lawyer time to order the title, review it, and investigate any issues. If you need more time for complex titles, your lawyer can negotiate a longer period.
What's the difference between "subject to title search" and "subject to LIM"?
A title search condition covers what's registered on the property title — ownership, easements, covenants, mortgages, and caveats. A LIM (Land Information Memorandum) condition covers council-held information — rates, building consents, resource consents, and hazard information. You should ideally have both conditions in your agreement, as they reveal different types of problems.
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