Case Study – The Impact of Noting the Incorrect Entity on a Contract of Sale

BY GUEST INDUSTRY EXPERT ANNE V. | Principal SMSF Lawyer

(Guest industry expert contributions are educational in nature and do not constitute advice. Contributor participation does not imply endorsement or preferred referral status.)

Imagine this: you’ve finally had your offer accepted, contracts exchanged, and your Self-Managed Super Fund (SMSF) is ready to secure a valuable SMSF property investment. Then, mid-settlement, your lender calls — the purchasing entity is listed incorrectly on the contract. It may seem minor, but the consequences can be serious.

Stamp Duty Complications

If the purchasing entity needs to change after exchange, you may be liable for double stamp duty, along with additional legal costs and delays in title registration. State titles offices may also request additional evidence before approving any change.

Finance Delays

Lenders will not approve the loan if the Contract of Sale does not exactly match the borrowing entity’s legal name. Even a minor typo can delay approval, risking your deposit and potentially the entire deal if the vendor enforces their contractual rights.

SMSF-Specific Issues

Accuracy is even more important when purchasing property through an SMSF. In some states, there is no cooling-off period when a trustee company signs the contract.

Additionally, SMSF contracts often exclude the name of the fund itself for privacy, instead listing:

• the trustee of the Bare Trust or Holding Trust,

• the ACN, and

• the trust name

  
  

Before signing any property contract, always have an experienced SMSF solicitor review your Bare Trust or Holding Trust Deed to ensure every detail aligns perfectly.

Incorrect Entity on a Contract of Sale: Why This Matters

These are not small compliance details — they are essential financial safeguards. An incorrect signing name or contraction entity can result in:

• double duty or penalty duty

• finance approval failure

• costly legal delays

• unexpected losses

• contract termination

  
  

A simple paperwork oversight can cost your SMSF thousands.

Getting It Right From the Start

Verify the correct contracting entity and trust structure early in the process. Ensure your SMSF lender, solicitor, and advisers are aligned and experienced in SMSFs— and that all purchasing details match your trust documents exactly.

Noting the incorrect entity on a Contract of Sale can result in unnecessary expenses or even drastic consequences. Addressing these details upfront helps smooth the way for your SMSF property investment and helps ensure a compliant and successful SMSF property transaction.

Finally, choose to work with an experienced SMSF law firm like ours for peace of mind.

ABOUT THE AUTHOR:

Anne V. contributes industry perspectives on legal considerations relevant to SMSFs and property. Anne is the Principal of an established five-star rated law firm. She has over 12 years of experience in family, property, commercial, transaction, and tax law. Her commentary is provided for educational purposes and does not constitute personal advice or recommendation. Explore your SMSF options >

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(GENERAL INFORMATION ONLY)

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DISCLAIMER:  Guest Industry Expert contributions are educational in nature and do not constitute advice. Contributor participation does not imply endorsement or preferred referral status. The views and opinions expressed in this article are those of the guest expert and do not necessarily reflect the views of the SMSF Intelligence team, its publisher, owners or its representatives and partners. No guarantee is given as to the accuracy, completeness, or timeliness of the content, and we do not accept any liability for loss or damage arising from reliance on the information contained in this article or any linked materials. This article is published for general information and educational purposes only and should not be considered financial, legal, tax, or investment advice. It has been prepared without taking into account your personal objectives, financial situation, or needs. Before making any decisions based on this content, you should consider its appropriateness in light of your circumstances and seek advice from a qualified professional. We do not provide financial, taxation, or legal advice.