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11 OCTOBER 2010 TRANSFER FROM A PERSON WHO IS NOT THE SELLER

11 OCTOBER 2010 TRANSFER FROM A PERSON WHO IS NOT THE SELLER

Q.Does a Buyer have to accept a transfer of land from a person who is not the Seller named in the Contract of Sale?

A. Generally, no. The standard REIQ Contract requires the Seller to give the Buyer at settlement a duly executed transfer of land, from them as Seller, capable of immediate registration, which means it must be a transfer from the registered owner of the land to the Buyer. If the Seller is not the registered owner of the land they can not give a transfer which complies with the terms of the Contract. A Buyer does not have to accept a transfer from a person that is not the Seller unless there is a Special Condition inserted in the Contract directing them to do so.

TIP: – If the Seller will not be the registered owner of the land at the time of settlement (eg. because the Seller is buying the property from a third party and on-selling simultaneously to the Buyer) the Seller must direct the registered owner to execute a transfer in favour of the Buyer (“a transfer by direction”). If the Seller needs a transfer by direction they must ensure there is a special condition in the Contract to that effect (ie. requiring the buyer to accept a transfer executed by the registered owner (who is not the Seller) and the Buyer needs to acknowledge that at settlement the Seller will not be the registered owner.