Can I change my name on a property contract after it is signed?
A common question that arises in conveyancing is whether the buyer entity on the contract can be altered after the contract has been signed.
This issue can arise in a range of circumstances; common examples include a buyer changing their mind about being included in the purchase, deciding to buy the property as a different entity (for example as a company or trust instead of an individual), or something as simple as a spelling mistake in a buyer’s name.
It is critical that the entities are correctly listed on the contract, right down to the spelling of names, as errors can have serious consequences, for instance in relation to finance approval and lodgement of legal documents.
So can the buyer name be changed after the contract has been signed?
Lawyers, All Together Now: ‘It Depends’
Whether the amendment can be made to the contract depends on the change itself.
Minor changes such as correcting misspelled names can usually be effected by an exchange of letters. This is where both parties agree in writing through their conveyancing solicitors to alter the spelling of the buyer’s name. The change is then legally binding on all parties.
However, where a more significant change is required, such as adding or removing a buyer, or deciding to purchase the property as a different entity, this should not be done by an exchange of letters.
How Can The Buyer Entity Be Changed?
If the buying entity itself needs to change, this should be done by the parties executing a Deed of Rescission and entering into a new contract.
What Is A Deed Of Rescission?
A Deed of Rescission is a formal agreement that revokes the original contract between the parties. It is different to a termination because instead of cancelling the contract on its own terms, it ‘undoes’ the contract and puts both parties back in the position they were before they entered into the original agreement.
The parties will then need to enter into a new contract as the correct entities.
It is critical that buyers and sellers have their Deed and new contract drafted or reviewed by an experienced solicitor to ensure their interests are protected.
Transfer Duty And Changes To The Contract
There can be serious consequences to improperly changing buying entities on contracts of sale.
If the buyer entity is changed other than by way of Deed of Rescission and new contract, for example by exchange of letters, the Queensland Office of State Revenue may deem the alteration to be a separate transfer for dutiable purposes, exposing the parties to ‘double duty.’
While transfer duty is usually paid by the buyer under the contract, the seller can also be liable under Section 17 of the Duties Act 2001 (Qld). It is therefore critically important for both parties that variations to the buyer entity are executed properly.
If you need to change your buying entity on your contract, it is crucial that you obtain legal advice from your solicitor as soon as possible.
If you have any questions about variations to contracts after signing, or any other aspect of conveyancing in Queensland, contact our experienced conveyancing solicitors today.
The above is not legal advice and is general information only.
Whether you are buying or selling, our dedicated team will work with you to ensure your property settlement is a stress free and exciting process. We want you to feel that you are in control of the conveyancing process, not that the process is in control of you. Let us show you how easy it can be.