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Purchasing under a trust - is "ATF" needed on contract?

Discussion in 'Legal Issues' started by alvaro86, 27th Nov, 2016.

  1. alvaro86

    alvaro86 Member

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    Hi All,

    If you have a trustee company which is trustee for a discretionary trust, in NSW, are you required to show "ATF ABC Family Trust" on the front page of the contract? Or can you just state the Trustee company's details on the contract and transfer e.g. XYZ Pty Ltd? I have read and been advised that you do not have to in NSW, but I have also read conflicting views.

    Also, is a Declaration of Trust and/or Acknowledgement of Trust definitely required to be lodged at the LPI? Or do you not have to provided the trust deed allows the trustee to purchaser property on behalf of the trust?

    I note on the new Purchaser Declaration Form that has to be executed and lodged when paying stamp duty specifically states if you are purchasing on behalf of a trust and if you tick yes, it asks the name of the trust.

    Any advice and answers as to the above would be most appreciated.

    Thank you all.
     
  2. Terry_w

    Terry_w Well-Known Member Business Member

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    You don't need to declare the trustee relationship on the contract of sale and you cannot (s82 real property act) put any notice about the trust on the transfer.

    Why are you doing a declaration of trust?

    You should be seeking legal advice on this as serious.
     
    Perthguy likes this.
  3. alvaro86

    alvaro86 Member

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    Hi Terry_w,

    I was reading on the old somersoft forum's and members were talking about Declarations of Trust and Acknowledgments of Trust. But I guess if its not required when I have a trust set up as per my first post.

    Just checking then if you sell property that is owned by the Trust, the same principle applies that you only show the Trustee company on the contract?

    Thanks again.
     
  4. Terry_w

    Terry_w Well-Known Member Business Member

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    A trust is not a legal entity - the trustee is - so a trust cannot be party to a contract. But the trustee can indicate they are acting in the capacity as trustee.
     
  5. thatbum

    thatbum Well-Known Member

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    Ummm, why aren't you getting legal advice on this? It seems you're getting your advice from old forum posts and now doing it again?
     
    Marg4000 likes this.
  6. JacM

    JacM VIC Buyer's Agent - Melb N & W, Geelong, Ballarat Business Member

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  7. Contracts for property are pages and pages thick for a reason. What other issues may be buried among the contract that could affect you ?

    I saw a solicitor when we bought our home and he identified a issue with neigbouring land that may affect us. We sought council clarification in writing and they replied quickly. Council later sought to vary consents for the adjoining land for a DA application by the owner. When we identified the issue they advised the landowner that the proposed change could not be made. The owner immediately realised they had to negotiate with us for their building plans. We did not oppose it (didnt want to end up in Land & Enviro) but gave us scope to ensure the changes suited us. We asked for changes that assisted us and affected neighbours further away. (Bastard act I know)

    Our "advice" from Council on this confusion was attributable to the lawyers advice. Cheap as chips and it paid again years after settlement.

    In respect of the OP this is ""ATF" question is a common one when a trust is buying property. The ÄTF isnt required on the contract but may be a very sensible recommendation. There may be times not to do it also. The trust name is silent on land title. The deed may be needed for land tax but not land title. There are many traps to settling property for a trust and sound legal guidance is essential. Some of the basic common issues :
    - No stamped deed or perhaps unsigned !!!
    - Trust not formed until days after the contract
    - Contract mispelt or error in the trustee identification
    - ABN ?
    - trust wasnt correctly settled prior to contract
     
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  8. Hedgy

    Hedgy Well-Known Member

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    Which is very important if the trustee carries on activities other than those of trustee.
     
  9. Terry_w

    Terry_w Well-Known Member Business Member

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    It could be, but most trustees should not be doing anything other than acting as trustee.
     
  10. And sometimes the company should never be trustee of more than one trust (or SMSF !). How can ABC Pty Ltd as trustee of the SMSF lease business premises to ABC Pty Ltd as trustee of the DT (trading entity). A legal concern arises that a lease type arrangement cant truly exist hence a SIS concern. Its like lending $ to yourself.
     
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