Case Study: The Land Search
In one of our previous posts, we mentioned that doing a land search is a must, prior to paying anything for a sub-sale property.
Here, we are going to share a case study based on a true event which a client of ours had faced.
Land Search: One of the 5 Must-Do’s
A few years ago, one of our clients was interested in purchasing a sub-sale property.
In order to compete with other buyers in terms of speed, he had paid the vendor the down payment without doing a land search on that property.
He then appointed us to draft the sale & purchase agreement for that transaction.
As part of the procedures, we did a land search and discovered that the land was not eligible for any transaction.
A Caveated Land Due to Past Disputes
As we investigated further, the reason for such ineligibility was due to the fact that a caveat had been put on the land by someone.
It turned out that the caveat was put by a previous potential buyer who had also paid a down payment to the same vendor.
However, the transaction had not been completed due to some disputes that were not resolved.
That was why the caveat remained there.
Cancellation of Transaction
With the caveat being entered on the land, our client had no choice but to cancel the transaction.
On the other hand, the vendor refused to refund the down payment.
This forced him to go through a series of tedious legal procedures (which cost him some legal fees) in order to retrieve the money.
In conclusion, doing a land search is a must for a prudent buyer in any sub-sale.
This is done for the sake of protecting the buyer’s interests.
We hope that this case study is able to raise the awareness of buyers towards the importance of doing a land search.
“Prevention is better than cure.“, as the doctors say.
Z. Hashim & Co.