What happens when a name is misspelled on a contract?

In real estate transactions, precision is critical—especially when it comes to details like the names of the buyer or seller on a contract of sale. An incorrect spelling or omission of a middle name on the contract can lead to complications. So, what happens if a name is not accurately reflected on a residential contract of sale?

The first and most crucial step is for the affected party—whether the buyer or seller—to consult their legal representative immediately. Prompt communication ensures that any potential issues can be addressed before they escalate.

Once informed, the legal representatives for both parties will typically agree to amend the contract. The preferred method for making this correction is through a Deed of Variation, which formally alters the contract terms. Alternatively, the adjustment can be made via an exchange of letters between the parties’ legal representatives.

Failure to address the incorrect name can lead to significant financial consequences. The individual whose name was misspelled may be at risk of facing Transfer Duty implications, such as paying double stamp duty or incurring additional Capital Gains Tax liabilities. Therefore, it's essential to rectify any errors swiftly to avoid these potentially costly penalties.

This emphasises the importance of reviewing all contract details carefully and taking swift action when necessary. Accurate documentation not only ensures a smooth transaction but also protects all parties from unintended financial burdens.

Thank you to Rebecca Petroff from Sunstate Conveyancing for sharing this very important information with us.