HDT, Corporate Trustee, Finance

[alwayscurious]

Setup:

My wife and I are directors of a PTY LTD which is the trustee of the family trust. (HDT, in case you wondered)

The trustee was instructed to purchase a property, which it is in the process of doing.

Finance is proposed through myself borrowing to purchase special units in the trust,
with the trust then using this money to purchase the property.

The loan docs come back, with the following conditions:

Directors gaurantee the finance. (OK, I get that concept, have seen it before.)
Directors obtain independant legal advice (Frustrating, but I've seen that before too on previous loans where gaurantees were used)
Directors obtain independant FINANCIAL advice (what the fruitcake ? Never seen that before!)

Interestingly the lenders wanted a certificate stating that our corporation was a non-trading entity before they would issue
the loan documents.

Anyone had experience in purchasing in the above setup, with similar experiences - are the lenders being overly
nuts about it??

Cheers,
a/c

 

[regrow]

alwayscurious

My set up is the same except wife is the Secretary.

Directors obtain independant FINANCIAL advice (what the fruitcake ? Never seen that before!)

It's a bit like the Legal advise clause. Just ask the bank to waiver this. I have done so with my last IP. The bank just wants to make sure you have had financial advise for what you are proposing to do, and your responsibilities etc.

Regards

Regrow

 

[JamesGG]

Hiya,

Those requirements seem to be the norm these days. Certainly was the case for me a few months ago.

Was bad enough that they insisted that I obtain independant legal advice when another document they provided gave the option to waive that right. Then, they demanded that I get independant financial advice from my accountant...

It's a funny game, leverage.

Cheers

James.

 

[alwayscurious]

your own accountant??

Was bad enough that they insisted that I obtain independant legal advice when another document they provided gave the option to waive that right. Then, they demanded that I get independant financial advice from my accountant...
.

So James - am I right in saying you went to your own accountant to get the financial advice?

I am assuming you went to another solicitor (one not party to the lender / borrower).

Cheers
a/c

 

[alwayscurious]

alwayscurious

My set up is the same except wife is the Secretary.

It's a bit like the Legal advise clause. Just ask the bank to waiver this. I have done so with my last IP. The bank just wants to make sure you have had financial advise for what you are proposing to do, and your responsibilities etc.
Regards
Regrow

Regrow - how did you go about asking the bank to waiver the financial advice clause? did you sign a deed asking them to do so?

 

[JamesGG]

So James - am I right in saying you went to your own accountant to get the financial advice?

I am assuming you went to another solicitor (one not party to the lender / borrower).

Cheers
a/c

Hiya,

The funny thing was, I am my own accountant for all intents and purposes. So, I got the old man to sign it.

The legal advice was signed by my solicitor, a cheque later.

I did try to get both of these waived, but, with no success.

Cheers

James.

 

[alwayscurious]

"independant"

Thanks for the responses so far!

The clause states it advice must be independant - one of the dot points the solicitor must sign off on is " I am not acting as a party for the borrower or lender"

Similarly for the "financial advice" part.

For me this is Frustrating as It means I have to explain my situation to a new solicitor,when I beleive we are getting timely advice from our current one. and it must be one that is not being used by me.

Oh well - I have asked that both clauses be waived. See what happens!

If not it might be an interesting excercise and I might make a new friend or get some good advice!


Cheers
a/c

 

[Medine]

Hi a/c,

I've done these for myself a twice now. I've had the financial advice requirement waived by one bank, but not by the other. Both times we had to get independant legal advice. This was my experience in a nutshell:

One solicitor that we went to was very official and insisted on reminding me for one hour that I had to pay back the loan (?!?). He charged by the hour

The other solicitor was appreciative that I made an appointment, was businesslike and understood the requirement. We were through in 15 minutes and he refused payment

In the instance that I had to get Financial Advice I got it from my advisor. It met the bank's requirements .

I guess I'm philosophical about it. An HDT is a tricky thing for alot of people to get their heads around. If I can find bank employees who are able to follow the process (if not to actually understand the concepts) then I'm happy, and willing to jump through a hoop or two to get the finance that I want.

Good luck with it!

Cheers, Medine

 

[Bandita]

Can anyone advise which lenders have such requirements?

We just did a loan through ANZ for a property purchased by a HDT and didn't have to do anything except sign the guarantor form?

Seems to easy with what's been posted....Hmmm....perhaps we missed something? Or lucked out (I hope!)?

Cheers,
Jen

 

[Francesco]

My documents required witnessing by a solicitor, who required looking through the HDT deeds to see whether it allowed providing indemnity to the trustee. Fortunately, no charge as that is what friends are for!

F

 

[sydneycider]

Wow Alwayscurious.. I'm going through exactly the same struggle myself (your mortgage isn't with Macquarie by any chance ?).
Went to see the independent solicitor today ($275 later), luckily she pointed out the independent financial advise requirement.. so now have 4 days to get all this together before everyone closes their doors for the holidays.

As a first time HDT user, I've gotta say they don't make it easy for us.

 

[Rolf Latham]

Hi All

Get used to it.

As Medine said, you have to work with whats on the table.

Too many people say HUH ?????? when asked to repay loans that their related entity isnt paying, hence the lenders are getting tougher, to ensure we understand

U no pay,we caoooooome and get your assets .

ta
rolf

 

[alwayscurious]

Wow Alwayscurious.. I'm going through exactly the same struggle myself (your mortgage isn't with Macquarie by any chance ?).
Went to see the independent solicitor today ($275 later), luckily she pointed out the independent financial advise requirement.. so now have 4 days to get all this together before everyone closes their doors for the holidays.

As a first time HDT user, I've gotta say they don't make it easy for us.

Nah, National Mortgage Company - selling a rebadged ING wholesale product (also known as Permanent Custodians )

Looks like a bit of a CYA move..

 

[regrow]

alwayscurious

Regrow - how did you go about asking the bank to waiver the financial advice clause? did you sign a deed asking them to do so?

I just asked them to waiver it when I was sitting in their office getting the loan.

JenD

We just did a loan through ANZ for a property purchased by a HDT and didn't have to do anything except sign the guarantor form?

Same we went through ANZ as well with only the guarantor form to fill in. The lady was new to trusts, so I worked with her to get through the process.


Regards

Regrow

 

[Bandita]

My documents required witnessing by a solicitor, who required looking through the HDT deeds to see whether it allowed providing indemnity to the trustee. Fortunately, no charge as that is what friends are for!

F

We thought this, called and asked the bank who could witness - they weren't exactly sure over the phone, so made an appointment, went in and turns out they didn't even have to be witnessed at all - by anyone! We signed the forms (all for HDT purchased property - loan in our names) - turned them in, done (I hope? )

We've had alot of dramas with ANZ and their lack of competency in loans, but obviously this may be one of their benefits!

Or of course, their lack of competence might show up in another thread asking if they can change our loan once again

To be honest though, once you get everything setup properly with ANZ, I've never found banking so easy. I even paid the deposit on our property through the "Pay Anyone" system they have setup for free. No need for a checkbook at all. Haven't had to actually enter the bank since we started with them until they pulled the whole "have to change your loan" bit

Cheers,
Jen

 

[Tizzy]

I've tagged on to this thread because the issue is related and I'd like your thoughts.

Papers for one of our loans has come through on 23rd December although they dated the loan 8th december. The loan is for the trustees of the Family Trust so we have to do the usual legal advice thing for the five trust members who are guarantors. Papers are due back early in January and the regular solicitor is on hols so we intend to use my husbands brother to sign off tomorrow. He's also a solicitor. Do you think the bank will reject the papers because his surname is the same as every guarantor?

 

[Rolf Latham]

Hiya

If the person is a solictor and isnt acting on the sale, on behalf of the trustee/mortgagor, thence he can provide that advice because he is independent of the transaction

ta
rolf

 

[monoply]

I had to get a solicitor to sign when I was getting a loan from St George for a HDT. Found a local solicitor that did it for $50.

Cheers

 

[Tizzy]

Thanks for that Rolf

All done and dusted. We'll now see if the papers pass muster. We must be getting faster at the whole guarantor/certificate signing charade. Only took half an hour this time round.

 

[tubs]

Dont the banks offer a free consultation with a financial advisor?
Why dont you use them, and save yourself the money? That'd put the wind up them!