Is it possible to add a name to a contract once all parties have signed ?

[L and P]

Very long story cut short.

We are making an offer and starting negotiations on a house tomorrow. For certain reasons we wish to keep a third name from the contract and add it once the vendor has agreed to a price.

I called our solicitor this afternoon but he wouldn't be back till Monday.

I have asked the Real Estate if a third name can be added later (didn't tell him our reasons or if it would even proceed to that point)and he seemed to think it could be done by the solicitor for a small fee.

Does anyone have any futher info on this ?

Thanks

Louise

 

[Propertunity]

Louise,

If purchasers A & B sign a contract which is then subsequently signed by a vendor, then purchaser C cannot be added at some later date - No.

The only way this can happen is if this first contract is collapsed with the agreement of all parties and a new contract entered into with A, B & C as purchasers at the same price. (there is a legal term for it and it has to be done right to avoid payment of double stamp duty)

If the new owners A & B want to have C on title down the track (or sooner rather than later) then they will have to 'sell' a % ownership to C, again incurring stamp duty, legals & possibly CGT (if there has been a CG between purchase & sale).

 

[deejay]

If you're deparate to keep someone's name out of it, you could buy that person's share in the name of a resulting trust. The trust is established by trust deed and indicates that the money is coming from party C. The trust deed may need to be stamped to be enforceable (ie, to make the duties office not charge you double duty, although some small stamping fees will still apply). The purchasers are parties A and B, and the trust as party C. Then the real party C claims their share from the trust after the sale.

 

[L and P]

Thanks guys.

Yes we are desperate to keep the third name off for the time being - gee we even wish we could keep our names off.

Long family saga is the reason. Wanted to buy names unknown to the vendor but obviously that is not possible.

I did look into the Trust situation and also making a company name but after discussing with the accountant it won't work in our situation. We want to buy for investment purposes but if it's in a trust any negative earnings are kept in the trust and can't be used against personal tax etc. Hope that makes sense.

Louise

 

[Dazz]

I did look into the Trust situation and also making a company name but after discussing with the accountant it won't work in our situation. We want to buy for investment purposes but if it's in a trust any negative earnings are kept in the trust and can't be used against personal tax etc. Hope that makes sense.

No it doesn't at all. In fact, it goes beyond making no sense. It's down right wrong.

Sack that one and go get a new accountant.

 

[BV]

Can't you have the wording "and/or nominee" with your name?

 

[JamesGG]

Can't you have the wording "and/or nominee" with your name?

Not in Queensland, from memory.

There's a lot that doesn't smell right about this thread, though.

 

[The Chaser]

Can't you have the wording "and/or nominee" with your name?

I investigated this option in relation to a Qld OTP purchase we have been looking at. Different reason to L & P though. Have a look at this thread for the outcome of what a solicitor advised.

http://www.somersoft.com/forums/showthread.php?t=56213

 

[L and P]

There's a lot that doesn't smell right about this thread, though.

I can assure you that I am for real. The www is a big place and I need to be careful of what details I give that could identify me and my family.

I will come back tomorrow when I am not so tired and give some more details.

BUT we bought a house today - how exciting !

 

[mja]

Yes we are desperate to keep the third name off for the time being - gee we even wish we could keep our names off.

Get some professional advice, but I believe you can do this with a bare trust.

Long family saga is the reason. Wanted to buy names unknown to the vendor but obviously that is not possible.

You don't know what you don't know. Just because one person says it's not possible doesn't necessarily make it so.

I did look into the Trust situation and also making a company name but after discussing with the accountant it won't work in our situation. We want to buy for investment purposes but if it's in a trust any negative earnings are kept in the trust and can't be used against personal tax etc.

That's for a discretionary trust.

A hybrid discretionary trust allows you to negatively gear, but there has been so much discussion and contention about this on this forum alone, you could spend hours reading through all the posts from the various discussions on whether you can or can't do it. So, get some professional advice from an accountant who's passionate about property.

 

[L and P]

OK.

Just to reiterate I did speak to the accountant and the way he explained it to me at the time was that a Company or Trust was not the correct way of buying for us. My head was ready to explode by the time I spoke to him so I honestly don't know enough about it to tell you why it didn't suit us.

The senario is as follows

Person XYZ makes mention on Wednesday that they are selling a family home. Person's A and B make it very clear that they wish to buy it. Person XYZ back peddles and has excuses as to why they can't / won't sell to A and B.

Move forward to Friday lunchtime. A and B hear that XYZ has been to a Real Estate and listed the house. B calls Real Estate and confirms listing and makes time for first thing Saturday to visit to begin negotiating and sign contract. A and B have not worked out at this stage exactly how they will pay for this. Banker is away for the afternoon as is Solicitor.

A and B are approached by C Friday night who really wants to see them buy the house and keep it in the family. C has no money problems what-so-ever.

Now why we wanted to keep C from the contract is because they are the ex-spouse of XYZ and if it was known they were involved then A and B would have no chance of getting a signed contract.

So we have signed just in our names and tomorrow our banker will sort out if we can afford it and if not then how it will be arranged that C will provide some of the money.

Just for interests sake I will be asking the solicitor if and how C name could have been added. We have decided to keep C from the title so that down the track we don't have to pay extra stamp duty to have it removed.

XYZ was very surprised at the speed in which A and B moved to buy the property as he thought they were not serious about wanting it !!

I will update later in the week if anyone is interested

 

[pully]

what a pity this could not be dealt with in the family so to speak, it would have saved the costs of selling through an agent for a start.

as the vendor and the agent know you really want this property, has the price been inflated at all?

good luck.

 

[L and P]

what a pity this could not be dealt with in the family so to speak, it would have saved the costs of selling through an agent for a start.

Absolutely, couldn't agree more. His loss though.

No price wasn't inflated. Price was already set prior to us contacting RE. We also had someone in the family who was on our side who found out what his bottom dollar figure was so we just negotiated up to that. It is worth it to us anyway. The capital growth will be good and the rental amount will be good also. Plus in many years time we will have a holiday house !

 

[BV]

In another thread it was mentioned that you can put a change of entity clause in the contract and then change the name on the contract before settlement.
http://www.somersoft.com/forums/showthread.php?t=56213

 

[L and P]

I spoke with our solicitor this afternoon.

The way we could do it is to have names A and B on contract. The transfer documents are filled out with the names A and B. The vendor signs then they are returned. At that point we add person C and the vendor is none the wiser.
This is only possible if the bank agrees, which we asked this afternoon and they can / will do this.

Lucky for us it's not needed this time but good to know for in the future.

 

[The Chaser]

I spoke with our solicitor this afternoon.

The way we could do it is to have names A and B on contract. The transfer documents are filled out with the names A and B. The vendor signs then they are returned. At that point we add person C and the vendor is none the wiser.
This is only possible if the bank agrees, which we asked this afternoon and they can / will do this.

Lucky for us it's not needed this time but good to know for in the future.

This may work in practice, but I would think that technically it would be fraudulent in some way. If the vendor were to find out he would likely be able to seek some sort of legal recourse against A and B for obtaining his signature by deception, given that not all details were entered on the documents at the time that he signed them. It could amount to some sort of breach of contract. I don't know but it sounds risky.

 

[L and P]

I agree, it does sound dodgy but that was the legal opinion. We didn't need to worry in the end thank goodness but I thought it was interesting all the same.

By the way did I tell you we bought a house on the weekend ( excitement has now overtaken the initial panic )