Property held in a Trust but title deed says "Tenants in Common"

My brother seems to be having an issue with his property and asked me for advice but I'm clueless about this.

Since the time he & his wife purchased the property a number of years ago it has always been held in a trust with husband/wife as personal trustees of that trust. All tax returns have been trust tax returns listing that property. All income & expenses has been from a trust bank account.

He recently looked at the title deed. On the title deed it says personal names and it's written "Tenants in Common" and each personal name has a fixed share written, eg. 4/10 share & 6/10 share. On the 1st page of the contract of sale it just lists the personal names. It's not marked as joint tenants or tenants in common.

1. Is there any issues with the title deed saying this when the property is actually held in a trust?
2. Does the title deed need to be changed & if so, would it be a few hundred bucks or so? Any implications fixing this?
3. What happens if the title deed is just left as is, will it make issues later once the property gets sold?

 

The trust is not a legal entity so cannot own property. The trustees own it.

I am not sure what the procedure is where there are 2 joint persons acting as trustee but would think it should he as Joint Tenants.

@RPI would have a better idea on this than me.

 

Now would JT have the right of survivorship if one of the JT trustees died?

 

If one trustee died the other trustee would continue on. If the trust deed provided that a different person became trustee the title would need to be transferred from the survivor to the new person or the survivor and the new person.

if a tenant in common owner died their legal personal representative would then become the owner, once probate or administration granted - but this is outside the scope of the trust.

Therefore I think tenants in common should be avoided by joint trustees.

 

Ok I'll await for others to comment.

On that train of thought, what happens if there are more than 2 persons as trustees? Eg. 3 or 4 for example. Also should be listed on the title as Joint Tenants as well?

Would anything need to be changed on the title deed in this case?

 

The same principals apply - should be Joint Tenants I think.

Yes, the new trustees name

 

TW is spot on.

Given the history available then the current title should not be overly concerning. Easy to demonstrate existence of trust by tax returns etc.

Even though the split is wrong each party holds their nominated share on the title on trust so I can't see a massive issue at first instance.

Haven't given it thorough consideration as would need to see trust deed, spend time contemplating issues etc.

 

Ok that's good that it seems the current title doesn't seem too concerning. Would it be an idea to ask the Land & Property Information to amend the title deed to correctly say Joint Tenants? Would they try and hit you up for an additional stamp duty for doing this or just a small fee for their admin work?

 

who did the conveyancing? and did they know about the trust?

This would not be as simple as asking that it be changed. If there is a mortgage then the mortgagee will need to consent and produce title, if there is a mortgage then there is probably a loan so the lender may have to reassess and then there is stamp duty - but there is provision to fix errors made which this may qualify for.

I am involved with a loan client adjusting ownership% now and the bank charges $350 to get their lawyers to reasses. So far no serviceability reassessment though

 

How do you know the trust was established prior to the contract ? If you cant evidence this perhaps the title is correct and the tax matters are all wrong ?

I have seen so many examples of this its crazy.- Often deed setup by accountant or even a cheapie online DIY job. Done after the contract was signed and exchanged etc.... Produce the deed and its undated, unstamped or dated days or weeks after the contract. This issue definitely needs legal review to avoid triggering a further issue with OSR when they find a defect. An unstamped deed may not be accepted to correct a defect.

One of the best I saw was a SMSF audit. The trustee and accountants said it was a pre-1999 unit trust. Date on the deed was the day after the laws changed not the day before. Fund was non-compliant.

 

Don't know who did their conveyancing. They never took out a loan to purchase the property so no mortgage.

Your reference to "stamp duty" above, are you referring to it on a mortgage or for correcting the title deed?

Their trust deed was dated and stamped a few years before they bought the property so there should be no issues with the execution of the deed.

 

duty on the transfer of land.

 

What did their purchase docs and offer etc say? Was it clearly established that the 2 parties were acting as trustees kt this trust in the purchase and not purchasing it in their own right outside of any trust involvement?

I'd get them to make contact with @RPI and get his advice on this. Will be worth the money spent