Having completed thousands of settlements for our clients over the last 29 years, it’s easy to understand that the team at Residential Settlements have pretty much “seen it all” when it comes to handling contract conditions and the settlement process.
However, a current case literally had us “seeing double” when an unfortunate error made by a rookie agent threatened to not only delay settlement, but also result in his buyers being hit with double the applicable stamp duty, when he inadvertently wrote up 2 contracts for the same sale.
In this instance, the agent initially wrote up the Offer and Acceptance (O&A) for the buyers, Mr and Mrs Johnston, (not their real name) with no Finance Clause selected. This was effectively a cash contract.
Becoming aware that the buyers did in fact require finance to purchase the property, he subsequently wrote up a whole new contract including the Finance Clause and this became contract #2.
Unfortunately this action resulted in the submission of 2 contracts for the same deal, each attracting the corresponding stamp duty and exposing his buyers to the prospect of having to pay stamp duty twice.
To rectify this situation, both contracts were submitted to the Office of State Revenue (OSR) with an accompanying explanation for the error with the 2 contracts. However, this is not a quick process and it can take up to 2 to 3 weeks before the case will be reviewed and one of the contracts can subsequently be cancelled to avoid having the buyers charged double the stamp duty.
In the meantime, the O&A has been set to settle according to schedule and the agent has learnt the hard way that, instead of writing up 2 contracts, he should have written a variation to the initial contract.
Image by Cathy via Flickr.