We often see contracts where the buyer’s details have been incorrectly stated. This article will explain how to ensure that the buyer’s details are correctly stated.

Buying a property through a company

If a buyer is a company and is buying a property in its own right (i.e. not in its capacity as a trustee) then the company name should be inserted in the contract e.g. ABC Pty Ltd ACN.………………….

The company’s ACN should be obtained and inserted. This can be obtained by a free search on the ASIC website. Such a search will also confirm that the company actually exists.

Buying a property through a trust

There are a number of different types of trust but the most common is a family trust which is also known as a discretionary trust.

No matter what type of trust that you are dealing with, there will be a trustee (or trustees) of a trust. The trustee will either be a company or an individual (or individuals). The trust deed will (or should) state that the trustee is empowered to deal with the assets of the trust and to buy and sell property.

The contract must stipulate the name of the trustee and the name of the trust e.g. ABC Pty Ltd ACN………….as trustee for The ABC Family Trust or John Frederick Smith as trustee for the Smith Family Trust .

We sometimes see the buyer as just The ABC Family Trust. This is incorrect.

Where you are dealing with individuals, the person’s full names should be stipulated.

Buying a property with a Self-Managed Super Fund

Self-managed super funds (“SMSFs“) are another form of trust. Care must be taken to establish whether the SMSF is purchasing the property wholly from its own funds or whether the SMSF is borrowing monies to purchase the property.

If the SMSF is purchasing the property from its own funds then the buyer will be the SMSF itself and will be stipulated in a similar way to the trust situation above. If the SMSF is borrowing monies to purchase the property then the superannuation rules require a bare trust to be created to purchase the property. In such circumstances, the bare trustee should be stipulated as the buyer.

Ensuring that the correct buyer details are inserted from the outset will save time and money trying to correct the situation.

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This article was originally published on the 24^th of June 2019. It was last updated on the 16^th of September 2022.

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This update is for your information and interest only. It is not intended to be comprehensive, and it does not constitute and must not be relied on as legal advice. You must seek specific advice tailored to your circumstances.