Title Requisitions - What are they?
A requisition is a demand, by a purchaser, to a vendor to remove from a certificate of title (before the purchase is completed) some encumbrance, easement or restriction which makes the title different from that which the parties entered into when executing the Sale and Purchase Agreement.
Clause 5.0 of the Eighth Edition of the ADLS/REINZ Sale and Purchase Agreement and Clauses 1 and 16 of the REINZ’s new Agreement set out the provisions relating to title, boundaries and requisitions.
A purchaser has ten working days from the date of signing the Sale and Purchase Agreement to give notice to the vendor of any requisition. If no requisition is made within that time the purchaser is deemed to have accepted the title.
There are also provisions in the Sale and Purchase Agreement that apply to the requisitioning of cross lease and unit titles. Any alterations to the external dimensions of a flat (that are attached and enclosed) are requisitionable as are any encroachments from a unit on a stratum estate property.
All requisitions must relate to a defect in title and include such things as easements, restrictive covenants and fencing covenants or when the vendor’s title is materially different from the title that purchaser has contracted to buy.
One of the important things to remember is that a Sale and Purchase Agreement is not unconditional until all the special conditions in the Agreement have been satisfied and until the requisition period has passed.
It should also be noted that the new REINZ Agreement for Sale and Purchase which is now in use as an alternative to the current ADLS/REINZ agreement does not have a requisition provision, as such. Instead, this new agreement includes the approval of a title as a condition of the agreement.