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Tuesday Mar 26, 2013

Be vigilant when signing contracts and making changes

It seems like a very obvious statement that buyers and sellers of properties need to read everything in the sale agreement carefully and that all changes must be in writing and initialled by all the parties.

However there are still cases where mistakes creep in and these can create major problems for all parties concerned, says Lanice Steward, managing director of Knight Frank Anne Porter.

In today's way of communicating and sending agreements via email it is very easy to lose or misplace one of the changes made to an agreement, said Steward.

The basics of all sale agreements are that the pages of the agreement must be initialled, insertions on pages (where there is a blank space to be filled in) do not need to be initialled, because initialling the bottom of the page acknowledges that you have read and understood all on that page, and both the buyer and seller must sign in full on the last page, along with witnesses.

If any changes are made to the agreement subsequent to the signing by both the buyer and seller, then these must be in the form of an addendum because if one party changes something in that agreement and the other disagrees then there is no binding contract, she said.

The change in the contract could then be disputed that it is not material clause but this might end up in court and could end up very expensive.

"If things are done properly there are very rarely disputes, putting all agreements and negotiations in writing prevents miscommunication and misunderstandings," she said.

Anne Porter Knight Frank Press Release


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