Poor DC Causes Damage Only In Hazardous Activity Sectors – True Or False? [Episode 2]


This series tackles the myth that poor Document Control can only cause damages in hazardous activity sectors. Episode 2 takes the example of poor document control impacting a couple selling their apartment.



A couple decides to sell their apartment. Their financial situation is very bad, they are struggling with numerous debts, and they do not have any spare cash at all. They hire a property solicitor/lawyer/notary to handle the sale. 


An initial sale asking price is decided – based on the market at that time. The notary sets out to develop paperwork and to calculate all due taxes and fees in reference to this initial asking price. 


Unfortunately, the property market is going through a recession and, in the best-case scenario, the couple will sell at a lower price than what they paid for the apartment. After all fees and taxes are paid, this will leave them in even more debt. The couple reluctantly accepts this idea, considering that they would lose even more money if they keep the apartment. Fortunately for them, that additional debt is just about the limit of what they can cope with. 


Over the course of the sale process, an offer is made on the apartment, which is higher than the initial asking price. The couple welcomes the higher offer, which they think will reduce the debt that they will be left with. They promptly notify the property lawyer and request that all paperwork calculations pertaining to fees and taxes be updated. 


The day before final sale paperwork is signed by seller and buyer, the lawyer shows the couple a draft of the fees and taxes that they will have to pay. However, the couple notices that the sale price has not been updated, as per their notification and request. The lawyer’s office got mixed up between the two versions of the paperwork, and they proceeded with the superseded version of fees and tax calculations. This revision control mistake will unfortunately result in heavy consequences. 


The next day, seller and buyer meet at the lawyer’s office to sign the sale off. The lawyer has updated the selling price and pertaining calculations. When it is time for the couple to sign, they realise with horror that the fees and taxes to be paid are three times higher than what they expected. It turns out that, with the higher selling price, the sale fell into a higher fee and tax category, with a much higher percentage than the couple anticipated. 


As a result, they are left with much more debt than they can cope with, including now debt to the lawyer himself. They are forced to take an expensive bank loan to re-pay the debt. Sadly, the stress caused by this ultimate financial debacle pushes the couple over the edge. They wind up separating and they each go through many years of financial hardship.


Ultimately, poor Document Control practices on the lawyer’s part (using an incorrect version of documents and not self-checking before issuing fee notes to the clients) have resulted in heavy consequences for the couple.


This story shows, once again, that poor Document Control does not cause damage only in hazardous activity sectors or in dangerous industries.


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