Beware of pitfalls in buying property

Signing a contract to buy a property (a flat, an office block or whatever) marks a point of no return. You have passed from the zone of negotiations to that of binding commitment. At least that is the idea.

Once you sign the contract it should be all over bar the shouting. In principle, it only remains for the seller to execute and deliver the deed conveying title to the property to the buyer, hand over the keys and collect the money.

There remains, however, one important matter to attend to. The seller has to prove that he actually owns the property that he has agreed to sell. In technical terms, he has to show and give good title. The buyer does not want to hand over millions of dollars only to find that the property was not the seller's to sell or that what he can sell is very different from what he contracted to sell.

What could go wrong? The very worst thing, of course, would be to find that the seller did not own the property at all.

This could happen in a variety of ways. For example, the title could have been extinguished by virtue of a squatter's adverse possession or there could be an unwritten trust under which the property belongs in its entirety to a third party who has not agreed to sell to the buyer.

There could be other problems which are not so drastic in their effect but which still mean that the buyer is deprived of the peace of mind he expects.

There could be defects which mean the title is open to a challenge which will drain it of some of its value or at least expose the buyer to the expense, worry and uncertainty of litigation.