When preparing legal documents or entering into a contact it is crucial that the parties’ names are complete, spelt correctly and match their legal identification such as a passport, drivers licence or birth certificate.
In this article we explain the importance of using your name correctly for the purpose of property transactions.
Common mistakes that are made when entering a name on a contract often include;
- Anglicised names or nicknames – These are names people may go by on a day to day basis that do not reflect their legal identification;
- Marriage or divorce – Where one of the parties have changed their name;
- Middles names – Often omitted due to them being unused and/or forgotten;
- Party is a trust – Not using the full legal name of the trustee and the trust
- Data entry errors – Such as typographical errors or even errors arising from an oversight in a previous transaction; and
- Cultural awareness – Some foreign names are written with the last name first.
Importance of Correct Names in Property Transactions
In property transactions it is particularly important that the identification of a seller exactly matches the registered title of the property that is being sold. It is recommended that a title search on the property is conducted before the contract is signed to ensure the names match. Similarly for the buyer, whether they are an individual, a company or a trust, the exact details must be inserted.
In most circumstances when buying or selling property you may engage with a real estate agent. The expertise of real estate agents includes marketing, negotiating and achieving the best price and contract terms, but agents are not legally trained and sometimes do make errors in respect of this issue.
Agents are encouraged to undertake a title search and to obtain copies of parties’ identification to ensure the details are correct when preparing contracts of sale.
Signing A Contract
Once you have signed a contract of sale in Queensland, typically the names of the parties cannot be changed unless a strict process is followed. Even minor changes such as incorrect spelling or a missing middle name on a contract may require the formal written agreement of both parties. Errors of this nature can cause difficulties or delays with finance applications, which can impact the process of settlement.
If you sign a contract that does not reflect the correct entity, or you want to change the name completely, it would need to be corrected by the parties entering into a Deed of Rescission which serves to terminate the original contract on the condition that a new contract is entered into by the correct buyer and seller.
Using A Professional
Solicitors are conveyancing experts who have been specifically trained in this area of law. The acting solicitor will ensure that the deed and new contract of sale are legally binding and that there are no adverse stamp duty implications for any of the parties involved.
For example, if an amendment to a buying entity was made without a Deed of Rescission, the Office of State Revenue may determine that the variation to the contract is a separate transaction and impose Transfer Duty on both transactions, causing significant expense.
We Can Help
Please contact the friendly team at ABKJ lawyers so we can assist you in this regard on (07) 5532 3199.