Number 1 Most Overlooked Section of Property Contracts
In my experience, and I’m sure that of may other would be property owners, the contracts involved are often drafted in a whole different language that mere mortals are not meant to understand. That is why it is imperative to always have a solicitor involved in these transactions. If you can find a solicitor who has excellent experience in drafting property contracts and is open with you about the word-play therein, then you just might save yourself a whole lot of headache and potentially lost capital.
But, just because you have a solicitor pouring over things doesn’t mean that your head should be fully and firmly in the sand. You should get yourself acquainted with sections of property contracts that will begin to make sense the more you buy and sell homes. Therein lies the problem. For most people, the most important part of that contract would be the clauses that state exactly how and when they are going to get paid and the ones that cover the actual transfer of ownership. There is, however, in my view, another clause that should command more of your attention. This is the #1 most overlooked section of property contracts.
The Parties involved
To many, as long as they have a solicitor and an estate agent handling things, they can sleep easy at night. But it is not unheard of for people to be swindled of their hard earned cash because the parties involved in the sale contract were less than fully forthcoming and divulgent of the actual truth. Here is why the ‘Parties Involved’ part of the contract is crucial.
1. For starters, you and the client/seller automatically enter into a binding contract provided it has been drafted and the terms have been agreed and the forms signed. What you need to know is that in a property sale, there are always unnamed parties involved. These unnamed parties are not bound by the same contract. Not legally.
2. Incorrectly named parties may not be fully bound by the contract. Spelling someone’s name in the wrong manner or not correctly noting all the parties involved leaves a huge loophole that might come to haunt you later on. For all they know, you were never in a contract with whoever’s name you have incorrectly spelt out on the documents.
3. Who actually owns the property? Just because someone is selling you property doesn’t necessarily mean that they own it or that they even have the rights to sell the said property. You need to ascertain for sure that the parties involved have the legal rights to make the transaction and that you won’t put down the deposit just to run into some Aunt who actually owns the building and is not inclined to sell.
4. Are the notaries authorised to actually sign the documents? Whoever is involved in the legal document signing and notarisation should be fully recognised by your local Governmental authority as signatories. This includes your solicitor, yourself, the buyer/seller and whatever witness you deem necessary for the process.
As you can see, there are quite a number of things that can go wrong with this process. It is wise to retain the services of people you trust while overlooking the property contract.
A Growing Trend In Property Contracts
If you like attending property meet events like that of the Pin Meetings of Simon Zutshi or the Community Meet Ups of Rick Otton, you may have come across the term ‘simplified contracts’ or ‘one-page contracts’. The growing trend these days is to simplify contracts so that all parties involved easily understand them. Solicitors are present to ensure that legal terminologies are still there, but not to the extent where laypeople no longer understand the terms and conditions of the contract. So that can be another option to avoid overlooking important clauses.