Have you ever encountered a situation where a buyer wanted to keep their identity hidden from the seller? One of our staff members, studying for a conveyancing diploma, came across this question recently.
They found that such a feat is possible. If for some reason a buyer (let’s call her Sue) wanted to buy a property without letting the seller know her identity, she could create an agency agreement with someone else – such as a friend, a real estate agent, or an accountant.
That person could make an offer, and the settlement agent would proceed to put the property into their name. There would be one difference in the process: when the transfer was lodged, a further transfer would be lodged, along with the agency agreement that would transfer the property into Sue’s name.
Section 42(4) of the Duties Act allows Sue to do this without having to pay double stamp duty, as long as the agency agreement was in place prior to the execution of the original contract. In this case, the only duty payable on the subsequent transfer is a nominal duty of $20.
While this may seem like a strange process, there are multiple reason a buyer might wish to do this. Sue might want to buy a property being sold by someone (perhaps an ex-partner) who had made it clear they didn’t want to sell to Sue, or would ask for a higher price. Another use might be if a famous person, or someone who needed to keep their identity secret for another reason, wanted to buy a property.
If someone was looking at this as an option, I would advise them to seek the advice of a legal professional.
Image by Chris Goldberg via Flickr.