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It provides the purchaser and/or lender with a clear picture of the legal title to the property; and any issues and risks potentially impacting the buyer’s planned use of the property; and the lender’s security.
A well-prepared, robust report on title will provide a buyer and lender with the information they need to make an informed decision on whether to proceed. This is, of course, separate to the thorough due diligence the buyer is expected to carry out in respect of the property.
The buyer needs to be satisfied that they will acquire the property free from undue risk; will be able to use and develop it as intended; finance the property; and eventually sell it unhindered by unexpected legal issues.
A lender will expect to be satisfied that the property will provide adequate security for the mortgage. If there are issues that may impact its security, the lender will expect these to be flagged up – enabling it to deal with those issues ahead of completion.
Reliance
Practitioners need to consider who, beyond the purchaser and any lender, might reasonably expect to rely on the contents of the report on title. This is particularly important because anyone who relies on the report on title (or other professionally-drafted or expert report) can expect the report to be true and accurate and free from errors.
A party who relies on an erroneous report on title could bring a professional negligence claim against the solicitors. For example, a report on title could include flawed information about rent reviews or arrears, service charge errors, errors in boundary information and lack of information about easements, covenants and overriding interests affecting the property.
It is common practice for a report on title in a commercial transaction to be distributed to directors/partners, investors and other third parties, for information purposes. But if it is not intended that such parties will rely on the contents of the report, it is vital to include a clear statement – either in the body of the report or by way of separate letter or email – clarifying that the report is prepared solely for the benefit of X (the client); and no other party should rely on it, unless they have explicit consent.
A word of warning: we are now practicing law in the age of advancing artificial intelligence. Just as precedents have been relied upon by lawyers for decades (with the attendant risks), AI must be approached with caution. It should always be used as an aid and not as an end in itself.
An AI-produced legal document or precedent cannot be relied on as accurate and up-to-date. AI is also known to ‘hallucinate’ by inventing fabricating solutions and legal cases. A trained, reasoning human being, having full knowledge of the transaction, its nuances and the parties involved must go through the documentation carefully before it is finalised.
They can then decide what amendments or additions are required before it is fit to be relied upon by the purchaser and lender.
We’re covering this topic our upcoming Autumn Commercial Property Conferences. Dive deeper into Reports on Title, Due Diligence and Commercial Lease Management and more at LAW2026. Book your place today.
