Conveyancing: caution when answering ‘late’ requisitions and the burden of proof when clearing up doubts concerning title

A seller’s solicitors should not answer late requisitions merely out of courtesy. Where the requisition is clearly out of time, the seller’s solicitors should either refuse to answer it or should make it clear that the answer is ‘without prejudice’ to their right to take the point that the buyer was out of time and had no right to raise the requisition. The burden of proof is not on the buyer to show that there is a problem with title. The burden is on the seller to show beyond reasonable doubt that the title is good. The standard to be employed is whether an experienced and prudent solicitor could advise that the buyer was not subject to the risk of the successful assertion against him of any encumbrance.

Chinawell Management Ltd v Strong Huge Corp Ltd ([2011] HKEC 1403), concerned an agreement for the sale and purchase of two village houses. The buyer raised requisitions concerning: (a) alleged illegal structures; and (b) a notice posted by a third party at the property claiming to be the owner of it. The seller had not dealt with the requisitions by the completion date. The seller argued: (a) that the buyer had not shown beyond reasonable doubt that there was an encumbrance affecting the title; and (b) that the requisition had been raised late.

The seller’s arguments failed. The burden is on the seller to show beyond reasonable doubt that the title is good. The standard to be employed is whether an experienced and prudent solicitor could advise that the buyer was not subject to the risk of the successful assertion against him of any encumbrance. It was not clear that the requisition concerning the third party was late since the third party claim had been raised with the sellers as soon as it came to the buyer’s attention. In any event, the buyer had attempted to answer the requisitions and so had waived its right to argue that they had been raised late. When a seller believes that a requisition has been raised too late it should either refuse to answer or else answer on a ‘without prejudice’ basis (stating that the reply is given without prejudice to the seller’s right to argue that the requisition had been raised late so that the seller had no duty to answer).

One Response to “Conveyancing: caution when answering ‘late’ requisitions and the burden of proof when clearing up doubts concerning title”

  1. Immigration Solicitor in Havering Says:

    It’s nearly impossible to find knowledgeable people for this topic, but you seem like you know what you’re talking about!

    Thanks

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