Chan & Naylor and PIT

[awesome wells]

Chan & Naylor (Finance) was approached AFTER the contract of sale had already been signed in your personal name “and/or nominee.”

Chan and Naylor said this would be ok as long as the solicitor said it was ok. It was a legakl issue rather than whether or not the lendor would accept it. We took responsibility for it being legal, Chan and Naylor took responsibility for it getting through the lender. C+N assured us everything would be ok.

After meeting with Chan & Naylor and after your solicitor initially advised you that the existing contract of sale could be redrawn, A Trust was set up with your agreement.

Upon Chan and Naylor's advice.

You then took it upon yourselves to set up a company to act as the “trustee company” which had a wrong start date, meaning the company was started after the exchange of contracts.

Upon Chan and Naylor's advice.

Consequently the vendor was not willing/ able to redraw the contract of sale into the trust name and issue a new contract in the name of the trustee company.

Over a 6 month period Chan and Naylor told us everything was ok and there would be no problems.

Then as a result of your solicitor not understanding the lenders requirements and believing he could simply supply a letter of nomination the issue was not pressed.

Didn't happen like that at all. C+N dealt with the lender. It's not the conveyances job to know what the lender's requirements are. C+N said they had good relationships with all their lenders and they had done this before and that it shouldn't be a problem.

The problem for the lender was “How could you have purchased a property intending to nominate a trustee and trust if the trustee company and trust was not set up at the time of purchase?”

Then C+N should have dealt with this much earlier. Like about 5 months earlier.

The answer is you can’t.

That says a lot about C+N. Did you make a mistake or did you always know there was going to be a problem.

We found the biggest fault with C+N is that your accountants don't speak with your lending brokers.

And while solicitors may argue the legal points of law and in this case a that a letter of nomination would have sufficed, lenders don’t really care about anything other than protecting themselves.

So why didn't you sort this out early in the piece? C+N said everything was okay and there would be no issues. You imply we knew there was a risk and took it. No true at all.

Had the trustee company and Trust been set up prior to the property being purchased – The lender would not have had a problem.

Again - C+N said this was okay.

If the correct company was setup as the trustee with the correct start date you would not have had a problem.

We set it up exactly as per C+N instructions.

So, even though Chan & Naylor had requested a number of times that you check with your solicitor that a new contract of sale could be issued and we were assured that it was possible,

It was legally possible. That's what you asked us to check. You then said you'd be able to handle the lender (who had not yet been chosen).

Rather than looking at this as a bad experience, it should be viewed as a cautionary tale of

don't deal with Chan and Naylor. Their internal departments don't adequately talk to each other.

I spend a countless number of hours every day with clients who have given no preliminary thought to the structure of their purchase and want to try and change it after they have purchased or are half way through a development when they discover the tax implications of what they are doing are onerous or when they decide they do not really want to be in partnership with.

Talk to your accountant, talk to your broker, talk to your solicitor before you purchase and make sure you “Project Manage” the task of purchasing the property. Each professional simply provides a task (Lender provides the loan, solicitor provides conveyancing, accountant provides tax and structure advice) and its up to the purchaser to project manage all the professionals. Similar to what a builder does with all the tradesmen.

Alternatively use a Buyers Agent who will do the “project Managing” for you.

It’s sometimes just too late once you’ve signed the contract of sale!

Chan and Naylor consistently made mistake after mistake after mistake.

 

[cu@thetop]

Over a 6 month period Chan and Naylor told us everything was ok and there would be no problems.

1. Why wasn't this sorted out within the first few days after contract was signed (but no doubt before finance approval). When did the solicitor know of the issue and when were C & N advised of the problem?

2. I agree that if you sign up on a contract without having got the trust / entity in place it is no use crying about it. In all honesty this issue was always going to cause grief with a financier.


There may have been a breakdown in communiction with C & N and certainly with your solicitor? Did they ring C & N. Did you use a conveyancer or a solicitor- if the former- why?

If you exchanged contracts why wasn't the problem picked up at the signing stage if you spoke to your solicitor? Was your solicitor in receipt of full instructions.

I can see at least 3 sides to this story.

 

[9-5 slave]

.

To clarify the facts;

Had the trustee company and Trust been set up prior to the property being purchased – The lender would not have had a problem. If the correct company was setup as the trustee with the correct start date you would not have had a problem.

Sounds to me you were laying the roof tiles before pouring the foundations - no wonder why everything came crashing down.

 

[Perp]

I agree that if you sign up on a contract without having got the trust / entity in place it is no use crying about it. ... I can see at least 3 sides to this story.

I'm with you.

aw, C&N have come across as very reasonable, even offering a refund of fees for problems that don't appear to have been of their making. Albertus has provided a very factual and logical account which would seem to explain the situation. You've only cast slurs without identifying specific wrongdoing on C&N's part. If you can provide evidence that C&N specifically advised you to set up a trustee company with a starting date post contract exchange, then my opinion may change, but at this point, I'm feeling sorry for C&N. (And I suspect I'm not alone.)

 

[awesome wells]

1. Why wasn't this sorted out within the first few days after contract was signed (but no doubt before finance approval). When did the solicitor know of the issue and when were C & N advised of the problem?

2. I agree that if you sign up on a contract without having got the trust / entity in place it is no use crying about it. In all honesty this issue was always going to cause grief with a financier.


There may have been a breakdown in communiction with C & N and certainly with your solicitor? Did they ring C & N. Did you use a conveyancer or a solicitor- if the former- why?

If you exchanged contracts why wasn't the problem picked up at the signing stage if you spoke to your solicitor? Was your solicitor in receipt of full instructions.

I can see at least 3 sides to this story.

Why don't you ask Albertus why she had to get involved in the first place? Had nothing to do with anything that she talked about. I wonder if she will be as eager to "set the story straight"?

 

[cu@thetop]

Why don't you ask Albertus why she had to get involved in the first place? Had nothing to do with anything that she talked about. I wonder if she will be as eager to "set the story straight"?

Albertus- can you throw some light on this?

 

[awesome wells]

1. Why wasn't this sorted out within the first few days after contract was signed (but no doubt before finance approval). When did the solicitor know of the issue and when were C & N advised of the problem?

The solicitor knew within a week of us consulting C+N.

2. I agree that if you sign up on a contract without having got the trust / entity in place it is no use crying about it. In all honesty this issue was always going to cause grief with a financier.

The C+N should have said they can't do it. But they didn't - they said as long as it was legal they could do it because they had a good relationship with their vendors.

There may have been a breakdown in communiction with C & N and certainly with your solicitor? Did they ring C & N. Did you use a conveyancer or a solicitor- if the former- why?

Yes there was a breakdown in communication with C+N. Right from the start it took days to contact them. They had a communication problem between their finance department and their consulting department.

There was no breakdown at all between us and our solicitor.

If you exchanged contracts why wasn't the problem picked up at the signing stage if you spoke to your solicitor?

It wasn't a problem. It was totally legal to do it the way we did it. Solicitor confirmed it, C+N said they could get it through.

The lender didn't knock it back because it was illegal, they knocked it back for other reasons.

Was your solicitor in receipt of full instructions.

I can see at least 3 sides to this story.

The point I make is that C+N made consistant errors. The senior supervisor had to take it over because of the incompetence of our initial case manager.

At this stage, the issues talked about above were not even on the table. They hadn't even started to be an issue by that stage.

 

[awesome wells]

Sounds to me you were laying the roof tiles before pouring the foundations - no wonder why everything came crashing down.

I'd like Albertus to explain to everyone why she had to come in and take control in the first place, because none of what she talked about was an issue at the time she came in. The issue she talked about only reared it's head right at the end after C+N had to submit our app numerous times because she got simple things like the amount we wanted to loan wrong.

 

[awesome wells]

I'm with you.

aw, C&N have come across as very reasonable, even offering a refund of fees for problems that don't appear to have been of their making. Albertus has provided a very factual and logical account which would seem to explain the situation.

Is there any reason you are happy to believe their account yet question mine?

Let's think this over:

What agenda do I have? Answer: only to show people how badly these people performed.

What agenda do they have? Answer: As if they're going to admit to that publicly.

Could it be a case of me just getting it wrong? Answer: No. I don't have it wrong. Our application even got blocked at one point because the person handling it went on leave and no one else at C+N could access it. We were at the bank once setting up a new account and asked them if they could see if they had an answer yet. Bank answer: you have been knocked back a few weeks back. C+N answer: it hasn't come through yet. And the reason it was knocked back was nothing to do with what Albertus claims. It was to do with servicing the loan. The C+N rep put doown some wrong information on the app.

You've only cast slurs without identifying specific wrongdoing on C&N's part.

If you can provide evidence that C&N specifically advised you to set up a trustee company with a starting date post contract exchange, then my opinion may change, but at this point, I'm feeling sorry for C&N. (And I suspect I'm not alone.)

I never said they advised me that. Where did you get that from? I clearly said that it was the situation at hand and as long as it was legal to do, then they would have no problem getting it through.

 

[Albertus 6]

Albertus is a boy - or at least I was when I got dressed this morning..
Therefore I am a "he" not a "she" please..

 

[Piston Broke]

Thnx for coming here and discussing this rather than just posting "ring this number blah blah blah".

Given what I see here it seems the AW case is both parties being were in the wishful thinking category.

Conclusion: Don't use accountants for advice on legal issues ie trusts & ownership (legal) structures.
And always seek independent legal advice, which is not the legal office or section of the accountant recommending a product.

And yeah, I was having hard time seeing Abertus as a "she" lol

 

[redwing]

Albertus is a boy - or at least I was when I got dressed this morning..
Therefore I am a "he" not a "she" please..

PHEW !!


Here I was reading the thread and thinking what nasty parents you had, thanks for clearing up the above

 

[Albertus 6]

Hi Josko,
"Why wouldn't I have bought negatively geared property in the higher income earners name?"

Because when it does turn positive which with the current property shortage will probably be sooner rather than later, you are going to end up paying the highest margin tax rate on the income.

Strangly I like making money not losing it

 

[JIT]

Hi Josko,
"Why wouldn't I have bought negatively geared property in the higher income earners name?"

Because when it does turn positive which with the current property shortage will probably be sooner rather than later, you are going to end up paying the highest margin tax rate on the income.

Strangly I like making money not losing it

So what's your solution Albertus??

With a PIT, presumably you will have to redeem units and pay CGT before streaming to a lower income earner...??

 

[dr.jauncey]

With a PIT, presumably you will have to redeem units and pay CGT before streaming to a lower income earner...??

Hi, conventional accounting laws would suggest so. But the PIT can do all sorts of amazing things. I heard that the latest version also makes a great coffee.

 

[Albertus 6]

I would recommend sitting down and starting with a plan. Think about how many properties you want to aquire in what sort of time frame, how long do you want to keep working, and then talking to your accountant (make sure they have the same view of property as you).
I am sure you would agree that the biggest problem most investors run into is that they fail to have a long term plan.
I am not an accountant so I am not sure about exactly what the PIT Does or Doesn't do with the changing Tax Laws.
Would I redeem units in a trust and pay some CGT tax? Maybe if it made long term sense. I would certainly be happy to pay some CGT now rather than pay income tax 40+% and delay possibly inevitable CGT. But that a discussion to have with my accountant.
What do you do when the properties turn positivley geared?

 

[navjit6]

So, even though Chan & Naylor had requested a number of times that you check with your solicitor that a new contract of sale could be issued and we were assured that it was possible, as a show of “good faith”, Chan & Naylor & Chan & Naylor Finance chose to repay all the expenses incurred in setting up the trust. We did not have to do that as the calamity of problem was not of our doing.

You could have used the trust for your next property purchase. Additionally, Chan & Naylor even purchased from you the trustee company that you yourself set up. Again as an act of “good faith”. We did not have to do that.

I doubt that any company repay's expenses "out of good faith" hahaha that is a joke...

 

[Rolf Latham]

Hiya Navjit

I cant comment on this particular case, but there are many a company that do take their corporate responsibility quite seriously.

Show me the leader and I will show u the calibre of the organisation !

ta
rolf

 

[navjit6]

yes i agree..but the bigger the company gets, the worse it gets at this.

 

[Perp]

I doubt that any company repay's expenses "out of good faith" hahaha that is a joke...

yes i agree..but the bigger the company gets, the worse it gets at this.

I think you need to get out more. I've many, many times known of large companies to make ex gratia payments.