Error in Contract of Sale - Rescind without penalty?

[mupps]

Hi there,

Have recently exchanged a Contract of Sale (with a 10 day cooling off period).

Have just been notified that the document I signed stated two vendor's names on the Contract of Sale.

Only problem being that one of the vendor's passed away a few months ago - to add the property was owned as Tenants in Common.

Have been advised by my solicitor that a Grant of Probate is required to allow the vendor to now take control and legally sell the home.

My question is i'd like to rescind (knowing this process can take quite some time) and would like to not forfeit the 0.25% holding deposit.

As the document I've signed is not technically accurate - is this still considered legal?

My solicitor couldn't provide a clear answer - skirted around saying that to help would cost $$$.

Any ideas??

 

[DaveM]

What does the contract say about rescinding? Just about every NSW contract I have seen has a special condition in it regarding either party can rescind should the other party die or become legally mentally ill.

If your solicitor cant give you an answer on it then I would be quite nervous that they know what they are doing.

Paging Terry W!

 

[mupps]

The only thing being that the party was deceased PRIOR to the Contract of Sale.

ie. Vendor's partner was deceased months ago - and we have only just signed the Contract (which is obviously incorrect).

Bad oversight on their solicitor's behalf in my view.
But from what i'm advised it won't bear any impact....

 

[DaveM]

How can the other party sign the contract if they are dead? If all parties have not signed then the contracts have not exchanged and you should be able to rescind without penalty. Unless the deceased's partner had power of attorney perhaps?

 

[mupps]

Thanks for your response Dave.

From what I've been advised the signed document received by my solicitor states only ONE vendor.

Therefore the copy that I've signed (with 2 vendors) would be with the vendors solicitor.

This is where I feel that document is in error and therefore - am hoping - i've got reasonable grounds to rescind without penalty...?

 

[starter]

Have you asked the otherside what the deal is? Maybe they have managed to work out the probate issues?

 

[DaveM]

From what I've been advised the signed document received by my solicitor states only ONE vendor.

Therefore the copy that I've signed (with 2 vendors) would be with the vendors solicitor.

This is where I feel that document is in error and therefore - am hoping - i've got reasonable grounds to rescind without penalty...?

You really need legal advise on whether one party named or two parties named makes the contract sufficiently different. My thoughts would be more around the agreed settlement date, if you had agreed on 42 days and its now going to be 90-120 due to probate then its not what was in the negotiated terms.

Sounds like your soli doesnt want to get involved/advise without additional payment which is a bit slack.

 

[mupps]

Sounds like your soli doesnt want to get involved/advise without additional payment which is a bit slack.

My thoughts exactly.....

Looks like it won't be worth the hassle in the long run. Will bite the bullet - rescind, move on, and find another solicitor for next round.

Thanks guys!

 

[DaveM]

Maybe speak to another soli before you to do see if you can get out of the 0.25% penalty. Terry W here is a sydney based soli, or feel free to PM me for contacts of a few I deal with.

 

[thepeoplesagent]

If what you say is correct, both contracts were signed but not identical. One could argue that this makes the contracts void.

If you as a buyer signed a contract and your name was spelt incorrectly, you could have a case to rescind the contracts even after exchange without penalty.

So, there is probably a good argument in getting your deposit back. However, the time and costs involved might not make it worth your while. If it takes 3 months and costs $1,000 to get back $1,200 is it worth it? Well, only you can answer that.

You may find that it would be a quicker process to buy this current property then getting a refund on your deposit. Your solicitor sounds like their giving you the worst case scenario.

I have had cases like these in the past and they are usually sorted quickly providing both parties are willing. Surely this can be determined by a quick phone call to the vendor. Example “who is the tenant in common? Do they want to sell for the current price”? Yes/no/maybe… easy.

I find that most people are happy to get something for nothing. This tenant in common will probably be overjoyed.

 

[wannaretire!]

If you as a buyer signed a contract and your name was spelt incorrectly, you could have a case to rescind the contracts even after exchange without penalty.

What is to stop a buyer then from giving the agent the slightly wrong name on purpose in order to have an extra "out" if the buyer changes their mind?

 

[TheShuffler]

It's called fraud...

Plus RE agents are supposed to look at your license when they fill in details of the purchaser. If you solicitor does it then it comes back to my first point. But let me know if you find a solicitor who is willing to put the wrong name on a contract intentionally!!

 

[thepeoplesagent]

What is to stop a buyer then from giving the agent the slightly wrong name on purpose in order to have an extra "out" if the buyer changes their mind?

Well if they were genuine about buying the property, and let’s face it, most buyers are. It wouldn’t serve much purpose. By deliberately giving the wrong name they risk the owners changing their mind or rescinding the contract. They would be shooting themselves in the foot as it would not take long to be discovered. In any case, I have never heard of someone doing this.

And @the shuffler. An agent is not required on ask for identification (unless a buyer is registering for an auction). I went to a training seminar a couple of months ago and this was a question asked.

 

[Aaron_C]

What is to stop a buyer then from giving the agent the slightly wrong name on purpose in order to have an extra "out" if the buyer changes their mind?

An error like that in a contract does not preclude the contract from being enforced as there is a contract principle called 'rectification'. For example if a credit card company billed you in the name of John Smith but your full name is actually John Edward Smith - can you get out of it? Of course not as long as the other salient details are correct and they are dealing with the right person.

 

[thepeoplesagent]

@ Aaron, I will have to respectfully disagree. I have had hands on experience and know of other agents and solicitors who have had clients withdraw prior to settlement due to “typo’s” on the front page of the contract. These have included incorrect spelling of names, wrong names, address, deposits and price.

 

[Aaron_C]

@ Aaron, I will have to respectfully disagree. I have had hands on experience and know of other agents and solicitors who have had clients withdraw prior to settlement due to “typo’s” on the front page of the contract. These have included incorrect spelling of names, wrong names, address, deposits and price.

Having incorrect names is a lot different to having a different price on the contract. I would never let a purchaser get out of the contract because they omitted their middle name or I spelt Robin with 'Robinn'. Take your deposit and see you in court if you want to challenge it.

 

[wylie]

It's called fraud...

Plus RE agents are supposed to look at your license when they fill in details of the purchaser. If you solicitor does it then it comes back to my first point. But let me know if you find a solicitor who is willing to put the wrong name on a contract intentionally!!

I've never been asked for my licence or any other ID when putting an offer to contract.

 

[Ed Barton]

I've never been asked for my licence or any other ID when putting an offer to contract.

Me neither IIRC. How are restrictions around foreigners only owning new property enforced then?

 

[mattysavager]

I've seen contracts where the buyer has written "Trish" instead of "Patricia".

Firstly - what moron would write their nickname on a contract of sale, and secondly - it was amended when the solicitors saw it.

In that scenario, both vendor and buyer still wanted to go through with the transaction.

I would suggest that in this situation, where there was an extra name that was not a vendor (as they are dead), it would be harder to rescind than if there was only one vendor name on the contract rather than two, for example.

Obviously something as major as an incorrect address as was just mentioned is a much more important error - and would be clear cause for termination of that contract.

If a solution isn't reached and it proceeds to legals, I would expect that the contract might be enforced with amended vendor names. Eager to hear how it goes.

 

[Terry_w]

I think in this case there could be arguments both ways. How much is 0.25%?

First thing to do maybe to ask if they will let you out without penalty.