In this uncertain trading environment, businesses looking to improve their due diligence and assess the creditworthiness of customers need to thoroughly investigate the assets owned by an individual or company. 

Similar to how searching the PPSR helps you understand who holds security interests in your debtors’ personal property, property searches reveal who has interests in your debtors’ real property. In addition to credit searches, businesses can benefit from conducting property and land title searches, including thorough conveyancing assessments, to gain a complete picture of their potential and existing customers’ assets. 

CreditorWatch’s integration with the award-winning InfoTrack portal gives our customers access to a comprehensive range of property searches, providing quick information about people, companies, and property directly from their dashboard. 

Creditors can better assess their customers, debtors, and guarantors by understanding the ownership details and value of their properties and title information. Property reports offer valuable insights to help businesses accurately assess creditworthiness and personal guarantees, mitigate credit risk, and assist in debt recovery. 

In this article, we explain the information that creditors can obtain from a land title search, property valuation report, common property, and national property ownership search. 

Land Title Searches 

A land title search can be used for various purposes, including assessing creditworthiness. To conduct a thorough investigation, businesses often turn to the land registry or land titles office. Besides confirming details such as the legal description and property identifier number (PIN), land titles provide property details such as the property owner(s), mortgages, easements, covenants, caveats, and leases associated with the property. Conduct a land title search to get a complete picture of a property, its limitations, and potential red flags. 

A land title search reveals the following: 

• Land Owners: View the names of all the owners of a piece of land; understand who owns the property and who is connected to the property. This gives you an idea of how much equity your debtor actually has in a property.
  
  If you see that your debtor or guarantor is not the person listed on the title, or if there are multiple owners, this could be a red flag as they may be declaring assets that they don’t fully own. 
  
  If the property has gone through multiple owners within a short period, there could be an issue. This could potentially indicate that your debtor may not have owned this asset for long.
   
• Mortgages: If there is a mortgage on the property, the bank holds a Certificate of Title, rather than the property owner. Mortgage repayments may be factored in as a liability when assessing creditworthiness.
  
  
• Easements: An easement is a right given to someone who does not own the property to use the property for a specific purpose, such as giving utility companies the right of way to access services or infrastructure. Easements can restrict the use of the land and affect the property’s profitability and resale value.
  
  
• Covenants: Covenants are rules and conditions that determine the land information, such as the use of the land, what can be built on it, and how this can be done. The encumbrances and ownership of land could affect the value or intended use of the land.
  
  
• Caveats: A caveat is a warning that someone else has an interest in the property. This may prevent the owner from conducting certain dealings, such as selling their property.
  
  
• Leases: This shows tenants who have an interest in the land. This may restrict the owner from property sales, creditors from obtaining possession of the property, or any other entities with interests in the land use. 

By revealing these details associated with a property, a land title search can inform a credit manager’s decision on a land description and whether a property can be used as security to obtain or refinance a loan. When taking personal guarantees or director guarantees, this provides a better understanding of the type of assets an individual has in their name and how much equity and control they have in it. 

In the broader context of due diligence, businesses can also consider consulting professionals in the field of real estate for a comprehensive assessment of the property’s market value and potential. Property valuation reports, provided by experienced real estate appraisers, can offer valuable insights into the current market conditions, recent sales history, and overall property trends. 

Property Valuation Report 

A property valuation report provides a professional assessment of the market value of a property. This is based on the condition of the property, recent and relevant sales history, and other relevant market data. Discover property information such as rates, size of land, construction and condition, immediate issues to be addressed, and comparative sales in the area. 

Businesses can use property valuation reports to gain insights into the value of assets owned by potential or existing debtors. This information can be obtained instantly or within a few hours, depending on the state government or territory (e.g., Victoria/Victorian government). Seeking legal advice on the implications of property valuation reports and consulting with a certified valuer can further enhance your decision-making process. 

National Property Ownership Search 

A national property ownership search reveals all the properties owned by an individual or company in Australia. Instead of manually searching each state and territory land public register, businesses can provide the individual or company name and receive the results of a single national search within a couple of hours. 

This comprehensive and time-saving search helps with assessing creditworthiness, addressing bankruptcy matters, and assisting in debt recovery. 

Contact Us

Protect your business and strengthen your due diligence with property title and land title reports from providers like CreditorWatch. If you’d like to learn more and gain further information about how you can leverage these insights for your business, get in touch with us today.