Making sure the Buyer's actual name in a Contract for the sale/purchase of property is vital.
This is because a person cannot just add parties to a Contract after it has been executed. Nor can a person simply enter into a new Contract if the parties to the Contract are entered incorrectly.
Consideration must also be given to the stamp duty consequences as it could be the case that you are up for double stamp duty if the matter is not handled correctly and according to law.
As an example, stamp duty payable on a $450,000.00 purchase for an investment property is $14,175.00 in Queensland. Therefore, if you entered into a Contract with incorrect details shown as the Buyer, you may have to pay that amount twice along with penalties and/or fines imposed by the Office of State Revenue.
Buying in the name of a Trust
If you are buying the property in the name of a Trust then the entity will be the Trustee (individual and/or company) as trustee for the Trust. You should check your Trust Deed prior to providing details to the agent for preparation of the Contract to ensure that you have the correct details.
Buying in your personal name
When purchasing in your individual name, it is necessary to put your full name including any middle names that appear on your driver’s licence and/or passport. Middle initials are not sufficient and if the Contract name does not match your name on your identification documents, then your financier will require the Contract to be amended to show the full and correct name.
Buying in the name of a company
If you are a director of a company which is purchasing, you will need to ensure the company's name is listed correctly (for example "Our Company Pty Ltd") together with the Australian Company Number (ACN). It is generally not sufficient to put "Our Company" or alternatively "Our Company P/L" and then forget the ACN. This is because there could be other companies with a very similar name!
Conclusion
Whilst it is easy to sign the Contract in a rush and not check the details, it will save you time, effort and money at a later stage if you make sure every detail is accurate.
If you are purchasing a property as an investment you should also check with your financier prior to entering the Contract as to whom they want listed. For example, if the purchaser is your SMSF, your financier may not want you to put your personal name as Buyer.
Unfortunately, it is not a simple matter to just add or delete a name from the Contract once signed. In fact, you could get yourself into trouble by doing so.
In the event a name/entity is listed incorrectly, you may need to consider entering into a Deed of Rescission and another Contract. Our team is well-versed with this process and is able to give you good advice that is in your language and your time.
If you need help because of a similar issue, feel free to give us call on (07) 3209 7000.
Disclaimer: This publication is not intended to be comprehensive, nor does it constitute legal advice. We are unable to ensure the information is current and there is no guarantee in relation to accuracy. You should seek legal or other professional advice before acting or relying on any of the content of this publication. The views and/or opinions expressed in this publication is that of the author and may not necessarily represent the views and/or opinions of RHC Solicitors.
RHC Solicitors ©