Protection of Property Assets Purchased in Personal Name

Discussion in 'Legal Issues' started by Laney, 28th Apr, 2020.

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  1. Laney

    Laney Member

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    What are the options for asset protection for properties purchased in your own name?
     
  2. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    heaps, depending on what you are trying to protect yourself against.
     
  3. Laney

    Laney Member

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    I listened to a webinar that put the fear into me about people or tenants suing individuals over things that are unexpected/largely out of their control. We have Landlords Insurance do we need anything else?
     
  4. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    Who was the podcast?

    I have an interest in asset protection, and advise on it as a lawyer. But I have never seen anyone sued by a tenant - other than for minor matters.

    But there are a few cases though. They all involved some sort of accident which could have been prevented - negligence.

    So the first step is to make sure anything broken is fixed quickly, especially where some harm could result.

    Second is to make sure you are properly insured.

    Third is to use an agent as that shifts some of the blame and they are insured.

    Then if you are still worried there are various strategies which youl could employ such as gifts and loans, mortgages, options, leases, rights to occupy, assignments, debt forgiveness etc You should read my tips in the legal section, and get some legal advice specific to your circumstances.
     
  5. Apollo

    Apollo Active Member

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    Lanes as a lawyer I would like to say that I come across a whole bunch of people who put fear into people for the purpose of simply lining their pockets. One of the notorious spruikers in this space is currently under investigation for serious misconduct / misrepresentation. Thankfully there are people like Terry on this page who give good, sensible practical and informed advice. To the extent your circumstances warrant some particular asset protection strategy I’d recommend that you take some personal advice from someone who doesn’t spruik through webinars. There are other members of my profession who give very sensible advice regarding asset protection through videos etc. Matthew Burgess is one I can think of. Terry here has given very good advice to many people on this page. I say that as a fellow who can recognise the value of his advice. So i’d seek out genuine experts rather than people who spread fear.
     
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  6. Paul@PFI

    [email protected] Tax Accounting + SMSF Business Plus Member

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    I have experienced three (maybe 4) clients with a vexatious tenant who claimed injury and damages and each used Lionel Hutz type law firms. In each case it spooked them but their insurer defended it and told the tenant they would seek rights for costs. One fell from a tree they climbed which was rapidly settled with the claim rejected. Another slipped on damp pavers on driveway. Insurer denied liability. And the tenant was evicted because they then didnt want to pay rent.

    Insurers have a first rule - Dont pay unless we have to. They can fight someone for a $15K claim and spend $115K. They dont care. The law firm they send the client to is paid a retainer.

    A poorly maintained property may be a concern. The insurer may have reason to pass the risk to the owner as uninsured. Disclosure when taking insurance may then be a landlord issue. You know the question - Is the property well maintained ? They arent just talking about the floors.

    Trees can be a good example. A site walk around with tree overhang annually etc may be a good strategy. Insurers may refuse a claim or the tree may be a neigbours tree. Inaction wont assist any defence.
     
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  7. Player

    Player Well-Known Member

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    Debt doesn't go astray. Obviously along with keeping on top of repairs and maintenance
     
  8. Paul@PFI

    [email protected] Tax Accounting + SMSF Business Plus Member

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    You think Westpac will allow a creditor any preference over unsecured rights. LOL.

    Debt is actually the perfect anti-asset protection. Reduce equity to protect. It's like burning cash to safeguard it. Or parlay equity into the next maybe.
     
  9. CraigI_55

    CraigI_55 Member

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    Interesting could you clarify this, I would have thought that increasing liabilities to reduce available assets would be one strategy to protect assets? Ie the gift and loan type scenario.
     
  10. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    When you borrow money your asset level does't change so it has little effect on your networth.

    e.g. I borrow $500,000 against my house - the net equity of the house has gone down but I have $500,000 of a new asset - cash which could be invested in something such as a new property - networth reduces by stamp duty etc amount
     
  11. CraigI_55

    CraigI_55 Member

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    Ahh yep of course, that makes sense. There would have to be some associated gifting to reduce assets.