All Topics / Help Needed! / Submitting offers through a family trust with corporate trustee – pointers and suggestions

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  • Profile photo of carlwilkcarlwilk
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    @carlwilk
    Join Date: 2004
    Post Count: 4
    August 17, 2011 - 11:14 am

    Hi All,

    I will be heading away this weekend for an IP shopping trip and plan to make use of my nice shiny new family trust with corporate trustee if I find anything suitable. I have bought and sold property in my personal name previously but this will be the first time using this structure so I was just hoping to pick anyone's brain that has been through the process for pointers and suggestions.

    I know I need to submit an offer in the name of: XYZ Pty Ltd ATF XYZ Family Trust – but thats about it…
     
    Are there any special conditions that people tend to write into the contract of sale when purchasing under a trust structure?
    – certain time limits, approvals from other trustees (whether they exist or not), extra exit clauses etc

    Tactics they adopt when submitting offers?

    Have people found that agents are more or less receptive to dealing with investors with trusts? More or less flexible in negotiating purchase price? etc

    Anything else anyone feels is worth sharing from their experience…

    Thanks in advance for any pointers or tips. Greatly appreciated.
    Carl

    Profile photo of TerrywTerryw
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    @terryw
    Join Date: 2001
    Post Count: 16,213
    August 17, 2011 - 10:49 pm

    generally same as usual, but the other side will probably want a special condition requiring a personal guarantee

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of Deal MakerDeal Maker
    Participant
    @deal-maker
    Join Date: 2011
    Post Count: 33
    August 18, 2011 - 3:04 am

    Hi Carl,

    From my own personal experience, we have submitted offers to buy houses in the same manner as yourself with "XYZ Pty Ltd as trustee". During the conveyancing process in Queensland, the financial institutions have normally asked us initially for a copy of our original trust deed upon which they then issue an instrument number.

    Under no special conditions that we place our letters of offer. It usually doesn't faze a real estate agent whether you buy it in your personal name or through a trust.

    Sherry

    Deal Maker | Great Property Deals
    http://www.greatpropertydeals.com.au
    Email Me | Phone Me

    Your Private Off Market Property Acquisition Specialist - Forget Buying Through Real Estate Agents

    Profile photo of carlwilkcarlwilk
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    @carlwilk
    Join Date: 2004
    Post Count: 4
    August 18, 2011 - 11:47 am

    Thanks guys for the pointers. Doesn't sound too different at all.

    If anything out of the ordinary happens I'll post back about my experience.

    Cheers,
    Carl

    Profile photo of Ashley CAshley C
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    @ashley-c
    Join Date: 2011
    Post Count: 36
    August 18, 2011 - 9:52 pm

    Hi,

    Shouldn't be too different.  A couple of tips – firstly, if you are signing a contract think about signing and/or nominee.  This will give you the option to use the trust or not.

    Also, for your record keeping you should have a resolution from the corporate trustee that the purchase is made in it's capacity of trustee for the trust. 

    Profile photo of TerrywTerryw
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    @terryw
    Join Date: 2001
    Post Count: 16,213
    August 18, 2011 - 10:50 pm

    Just be careful with and/or nominee. I agree that you should always use it, but there are stamp duty issues if the nominee doesn't exist at the time of the contract and/or if there is no written agreement in place at the time of signing. Seek legal advice.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of rhino101rhino101
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    @rhino101
    Join Date: 2008
    Post Count: 31
    August 19, 2011 - 2:16 pm

    We have bought several properties in this manner in the past. I never even mention to the agents that it is a trust involved, just go about business as usual and then make sure you get the name and wording right on the contract. Have never had any problems or issues with agents and it is certainly great when you sell and can distribute the profits in a manner you chose.

    Profile photo of Deal MakerDeal Maker
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    @deal-maker
    Join Date: 2011
    Post Count: 33
    August 23, 2011 - 12:48 am

    Hi Carl,

    I agree with Terryw . Be very cautious in using and/or nominee in your contract to purchase. When I started off 12 years ago we used to use and/or nominee all the time and so you don't get hit with double stamp duty you need to ensure that you get the process correct prior to placing contracts on properties. We are based in Queensland and my solicitor has also advised me not to use and/or nominee for another reason which I cannot think of off the top my head.  Therefore, if you are interested in using and/or nominee please always seek independent legal advice on the matter.

    Hope this helps.

    Sherry and Jason

    Deal Maker | Great Property Deals
    http://www.greatpropertydeals.com.au
    Email Me | Phone Me

    Your Private Off Market Property Acquisition Specialist - Forget Buying Through Real Estate Agents

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