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Title Deed

Title Deed

Title Deed and Lenders’ ineptness

A NSW buyer (owner of a small business) was referred to us by her accountant with the intention to buy two investment properties.

As per our operational procedure, we first sought and received a copy of the written pre-approved finance, which was based on the client’s capacity to maintain the loans based on her interstate investment, a free-hold fully paid property.

At the end of 11 weeks, we presented a short-list of properties which were inspected by our client and from which she chose 2 properties to buy.

We proceeded with the price negotiations and our written offers were accepted. The contracts were signed with a 0.25% deposit and a 5 day cooling-off period condition. The outcome of the building and pest inspections were positive. So was the lender’s valuation resulting in a written unconditional finance approval.

Three days into the cooling-off period, the lender emailed the client requesting a copy of the title deed of the interstate property. This was duly sent via facsimile. Surprise, surprise, the lender emailed the client again, this time requesting the original title deed. The client was in possession of only the photocopy of the title deed (never bothered to ask for the original when the loan was paid off).

The client immediately contacted the interstate lender which financed that particular investment property and requested the original title deed to be air-expressed next day to Sydney. The lender could not comply because they lost the original title deed and advised they will have to arrange for duplicate originals to be issued by the relevant government department.

A process that will take up to 3 months, according to the bank!

Consequently, the Sydney lender withdrew the written unconditional approval and the acquisition of the two Sydney properties fell through.

The morale of this case is:

  • Ensure you are in possession of the original title deed of your free-hold property. You never know why and when you will need it;
  • A bank’s written unconditional finance approval is neither unconditional nor guaranteed.