Cata

If a trust mortgages property, that may not necessarily mean a loan agreement.

If it did, and the individual was sued, that loan could possiblly be called it as it would be an asset to the individual. So the trust taking a mortgage over an individual’s property may not work if it was a loan.

I am not sure of the legalities of all this. A mortgage is really just a lien, or a security device over property (I think), and the loan agreement, if any, is separate.

A mortgage could be taken for a number of reasons. (I can’t think of any at the moment!)

Any comments?

Terryw
Discover Home Loans
North Sydney
[email protected]

I am not a solicitor either, but.

It seems there is a dispute over the interpretation of “plant and equipment”. The contract was with the vendor/purchaser, not the REA, so any communication should have been to you or to your solicitor not the REA. And this communication should have been done before acceptance of the offer (ie exchange?).

So I guess three issues standout:
1) does plant and equipment included a bore pump? If so,
2) can a communication to the RE agent mean communication to the purchaser. Maybe not, agent represents vendor
3) Did agent communicate that the pump was not included.

Terryw
Discover Home Loans
North Sydney
[email protected]

There is really only one way to pay off a loan quicker. And that is to pay more into the loan as quickly as possible. There are variations on this with offset accounts and LOCs etc, but having a LOC on an investment property would be a disaster taxwise.

An offset account would be a good idea. Especially if they may need access to funds later on.

Terryw
Discover Home Loans
North Sydney
[email protected]

Its not something I would do, but I had a client today that wants a PI loan on his investment property. Some people are just more conservative and more comfortable with paying off debt.

Terryw
Discover Home Loans
North Sydney
[email protected]

If you are looking for a good solicitor in NSW that is familiar with wraps, try Anthony Cordato http://www.businesslawyer.com.au

Terryw
Discover Home Loans
North Sydney
[email protected]

It may come down to size and the actual postcode of the studio.

Terryw
Discover Home Loans
North Sydney
[email protected]

Rob

“Consideration is the price paid for the promise”.

eg A agrees to sell X to B for $100,000.

Lets analyse this a bit futher. There are two parts:
A’s promise to transfer title of X to B.
B’s promise to pay $100,000 to A

– B’s consideration for A’s promise is the promise to pay A $100,000 for X
– A’s consideration for B’s promise is transfer of title of X to B.

Deposits don’t come into it. And I think there would be a valid contract whether a deposit was paid for or not (provided other conditions were met.

Accepting a nil deposit certainly wouldn’t be a wise thing to do however.

Terryw
Discover Home Loans
North Sydney
[email protected]

No. Watchout, that could be bad advice. Wizard obviously do not have an offset account.

Once you pay money off a loan it is considered a repayment. Any withdraw of funds is considered new borrowings (by the ATO). So if you take money out for personal purposes the interest will not be deductible. If you used an offset, the interet on the loan would rise again when you make the withdrawal and this would be deductible as you have not taken any money from this loan account.

Terryw
Discover Home Loans
North Sydney
[email protected]

Eleven

Make sure you get some advice before doing this yourself. A few comments on your scenario above.

1. The trustee would need to be in existance before the trust is settled.
2. Why have two directors? It only creates more risk. It is better to have just one director, and possibly one shareholder (as lenders may ask for guarrantees from all shareholders).
3. You probably wouldn’t be able to claim the interest on your own income unless you used a hybrid discretionary trust and you borrowed in your own name (to buy the units).

Terryw
Discover Home Loans
North Sydney
[email protected]