Name on Lease Agreemnet

Discussion in 'Legal Issues' started by ORRAHT, 15th Jun, 2015.

  1. ORRAHT

    ORRAHT Member

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    Good afternoon,

    We are a new SMSF and have purchased a Unit off the Plan ,which is just about completed and ready for occupancy. We are now ready to engage a Property manager and sign a Management Agency Agreement.
    We have been told conflicting information on what name the Management and Lease agreement with the Property Manager should be put in. We have been told the SMSF Trustee's Name ( PTY LTD Company ) or the Custodian Trustee of the Bare Trust also a (PTY LTD company ).
    Could someone out there please advise the correct legal title the Agency & lease should go in.

    Terry
     
  2. Terry_w

    Terry_w Member

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    You need to seek specific legal advice.

    The legal owner of the property is the custodian trustee. A non owner cannot enter into a contract for a property it doesn't own. However, the custodian deed may provide a power of attorney for the SMSF trustee so it can act as attorney for the custodian.
     
  3. ORRAHT

    ORRAHT Member

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    Thanks Terry w,

    My Homework has led me to the Custodian Trustee as well with the Rent being paid to our SMSF Trustee companies name. If the Custodian name goes on Management and Leasing Agreements with the Property Manager paying Rates , fees , levies etc on the Custodians behalf would that mean that any documents regarding income and expenditure raised by the Managing Agent would be in the Custodian's name. The payment of expenditure and receipt of income is made by the Trustee of the Superfund which would have to lodge in the next ATO Return. ?
     
  4. CosmicTrevor

    CosmicTrevor Member

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    As Terry says get specific legal advice on this. Probably the best place to start is the firm that provided your Bare Trust documentation.

    In my case, the contract for sale was executed by the Custodian, thus the title is held by the Custodian, thus the contract with the PM is executed by the Custodian.
     
  5. Paul@PFI

    Paul@PFI Tax, SMSF & Planning

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    Wow - A question no SMSF trustee should be asking. A sign of further problems I forsee...

    - Trustee declarations and written consent
    - Investment strategy
    - Member insurances and trustee determination ?
    - When is the due date for the first tax return and audited reports ?
     
  6. Paul@PFI

    Paul@PFI Tax, SMSF & Planning

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    There are specific SISA provisions that allow the SMSF Trustee/s to also be party to a lease / contract. Its got nothing to do with bare trusts as such although that may well address the answer too.

    Tip : A Custodian must be appointed in writing by the Trustee/s. All trust property held by a custodian must also be record the fund interest distinct from that say of a trustee. (ie agency rental funds)