The new ‘pre-contract investigation of title’ (PCIT) system will deliver cost-efficiencies as well as ironing out any title wrinkles ahead of contract-signing.
This fundamental change to the legal practice and procedures involved in buying and selling property has been designed by the Law Society of Ireland, in consultation with solicitors, as part of a drive to improve efficiency and achieve greater transparency in the conveyancing process.
The new process achieves transparency because any issues are fully revealed before one is “locked into” the contract.
“Every property sale involves a process called ‘investigation of title’,” explains Michael Walsh, partner and head of property at ByrneWallace.
“It requires the buyer’s solicitor to carry out certain checks on the property’s title. Historically, copying and exchanging the documents needed to investigate title was a difficult task, and took place after the buyers and sellers had signed contracts.”
“This means that the system has, up to this point, been structured so that queries or problems relating to the title to the property can often arise at a very late stage in the transaction. It is not unusual for such issues to severely delay or even completely kill a deal, which can be expensive as well as extremely disappointing.”
The Law Society and conveyancing solicitors have worked together to develop a better way to reveal and resolve such issues at an earlier stage in the transaction: the pre-contract investigation of title system.
“Essentially, pre-contract investigation means that a buyer’s solicitor must carry out a full set of detailed checks on the property’s title much earlier in the sales process,” Mr Walsh outlines.
“This is to ensure that any and all issues are revealed and – importantly – resolved before contracts are signed.
Crucially, when the buyer and seller sign the contract under the PCIT system, the buyer is automatically deemed to have knowledge of all issues relating to the title and to have accepted them.
“Independent legal advice at an early stage is critical for buyers in particular under this new system.”
Mr Walsh explains that the PCIT system will be more efficient and cost-effective for everyone involved in a property sale.
“We may also see a reduction in the time frame between signing the contract and handing the keys over to the buyer.
“This will very much depend on finance being ready and available, but this new process aims to reduce or avoid the current duplication of work and effort and minimise the potential for disputes that can lead to delays in completing the sale,” explains Mr Walsh.
“This is one of the most fundamental changes in conveyancing practice in a very long time.”
The PCIT approach to property sales is well-established as a feature of the new homes market as well as in higher-value or particularly complex transactions. It has also been visible in sales of property by receivers in recent years.
“The PCIT structure is a familiar, tried-and-tested approach in certain parts of the property sales market, and we know that buyers are willing to undertake the work of title investigation in advance.
“Expanding this system to all property transactions takes advantage of evolving technology for document sharing and paves the way for more secure property sales contracts,” Mr Walsh concluded.