Public Trustee as tenant in common

[The Mop]

Hi the experts,

I’ve landed the Public Trustee of Queensland as tenant in common.
First sign of trouble was the council’s half-yearly bill due in February not arriving.
I asked the council in late January and they said that the house’s address was the trustee’s PO box.
When I asked the trustee if they were going to fall over me to pay the rates in time, they quickly E-mailed me bad copies of the rates bill.

If I hadn’t gone running after the bill, I would have paid over $100 more for being late because I’m liable for the rates and the trustee was doing nothing.
The trustee now receives all mail from the council and probably from other places that I don’t know of yet.

They since sent me a copy of the title where I’m a tenant in common with 61%.
They’re a tenant in common as personal representative with 39%.
They’re listed as having “rights and interests reserved to the crown by deed of grant number so.”
The house is two units on one title, with no set boundaries between the units.

I have life tenancy of the whole house, but if I want to sell, who will be the seller ?
Can the trustee say that only they can sell at their price ?

Thanks for your troubles and ideas.

 

[pennyk]

Hi,
There is another thread on the PT, where I have given my experiences.
http://www.somersoft.com/forums/showthread.php?t=70356&highlight=public+trustee

I assume that this is an inheritance of some sort? Our experience has been the PT would prefer to sell a house rather than rent it, because its easier for them to manage cash than property. So, you may well find they will be happy to sell.
cant offer you much other advice, cause I dont really understand your situation. But if possible, I would try to avoid having any business relationships with them.

 

[The Mop]

Hi Penny,

Belated thanks for your post and the link to your dealings with the Public Trustee.

My partner in the house has passed away and the public trustee is her legal representative.
The house is a duplex on one title and I’m living there.
Her will gives me life tenancy of the whole house, but unexpectedly, if her unit is rented out the trustee will collect the rent for her estate.

The public trustee feels like an incompetent criminal organisation.
The rules appear along the way.
I’m trying to find the chapter and verse that explains what rights they have because it looks like they’re a law onto themselves.

I’m trying to find out if any stake in a house gives them privileges that override my rights.
They would happily sell, but it looks like I won’t have a say in the process.

Thank you.

 

[Terryw]

Wow, this is an unusual one.

You might be interested in browsing the Public Trustee Act (QLD)
http://www.austlii.edu.au/au/legis/qld/consol_act/pta1978179/

I would think that if you want to sell this house, or any house, you would need the consent of the other owner. If this is not given then you would need to apply to the supreme court for an order to sell.

Just remember they are public servants and there is a beauracracy involved in any decisions they make. They must follow correct proceedures.

 

[The Mop]

Belated thanks for this, Terry.

Very interesting reading, especially section 17A where it says that the public trustee can grab whatever money it considers 'expedient'.

PUBLIC TRUSTEE ACT 1978 - SECT 17A

17A Priority etc. of fees and charges

(1) The public trustee may retain or pay out of an estate the public trustee is administering, in priority to any other claims--
(a) expenses (including liabilities) a trustee may retain or pay out of trust property, or that the public trustee considers are necessary or expedient for the management of the estate; and
(b) fees payable for a service the public trustee provides.

(2) The public trustee is to decide whether the fees and expenses payable under this section are to be paid from capital or income.

(3) The public trustee has a general lien on all property comprised in an estate the public trustee is administering for the payment of--
(a) fees and expenses payable, including fees and expenses payable under this section for the administration of the estate; and
(b) costs, fees and allowances and charges earned by the official solicitor or another lawyer who is a public service officer for the public trustee in connection with a proceeding relating to the estate.

(4) The public trustee has the same rights of lien a lawyer who is not a public service officer would have for costs and charges for work of a legal nature--
(a) done by the public trustee or the official solicitor; or
(b) done for the public trustee by a lawyer who is a public service officer.

 

[Terryw]

Belated thanks for this, Terry.

Very interesting reading, especially section 17A where it says that the public trustee can grab whatever money it considers 'expedient'.

they have priority too!

 

[the helix]

They since sent me a copy of the title where I’m a tenant in common with 61%.
They’re a tenant in common as personal representative with 39%.

Hi Mop, what is the background here? Who owned the property before the Public Trustee came along? From what you have said, I would assume it was yourself with a 61% share, and someone else..?

You need to remember that the Public Trustee aren't an owner here.. the are a personal representative, or executor.. they are holding onto a share of the land in a trustee capacity for the beneficiaries of a deceased estate or someone incapable of dealing with their affairs.

They’re listed as having “rights and interests reserved to the crown by deed of grant number so.”

This line may be misleading, but it has nothing to do with the Public Trustee. This type of statement is on every single freehold title in Queensland. In general terms, it means that the crown (read: the state) have the rights to any tasty minerals, gold, coal.. on your property. These conditions will be listed in full on the deed of grant they quote.

I have life tenancy of the whole house, but if I want to sell, who will be the seller ?

The short answer: Both of you.

The long answer: This is where it is going to get tricky.. the term you used, life tenancy suggests to me that the Will left by the other party (I'm assuming here that the previous owner passed away) allowed you the "right to reside" (over their 39% share) but after your life tenancy expires, (ie: you move out or otherwise relinquish this right) then the 39% share will pass according to their Will, to the beneficiaries listed therein.

Have you resolved the communication problems with the council..? If the council won't play ball, I suggest giving them a copy of the title that the Public Trustee gave you. This will show them that you are still listed on the property. Once you tell them that you're interested in paying the rates, they should warm up to you quick smart.


Usual disclaimer.. I'm not a legal professional... seek legal advice, etc.

Edit: Fractions

 

[Terryw]

I've re read Mop's post.

Mop, you say you have a life tenancy, yet are also a legal owner of the property. Does this mean you have legal and beneficial ownership of your 61% share with a life tenancy in the remaining share?

If so, and you want to sell, you will only be able to do so if the will permits it. I imagine someone else will get the 39% share when you die and your share you can leave in your own will.

Some wills have a clause which enables a property subject to a life tenant to be sold and the proceeds used to buy another property (or put into bank etc) but the life tenancy goes with the sale. ie the new property would be the same deal with any left over money held on trust for the remainderman when you die.

 

[The Mop]

Thank you, The Helix and Terry, and my apologies again for the very late reply.

I have applied to the council to redirect their bills to my bank’s B-pay view, and they very quickly obliged.
The half-yearly bill due in August was listed on B-pay view today, and they no longer send the bills to the trustee.

I have legal and beneficial ownership of my 61% of the house, and my partner in the ownership of the house, who passed away last year, owns 39%.
The public trustee is her legal representative and executor of her Will.
I’ll try to scan, erase the names and post the house’s title tomorrow.

Her Will gives me the lifelong right to reside over her 39% share.
If and when I sell or die, her 39% stake reverts to her residuary, whose beneficiaries are her younger relatives.
There is no clause to allow the buying of another property with the same tenancy agreement.

Her Will also says to pay off the mortgage from her superannuation, and the trustee has only partly done so by now, while the bank keeps slapping on interest.

Many thanks for your very expert explanantions.

 

[Terryw]

There is a clause which says "income actually produced by the property is to be applied as income under my Will". Other clauses of the Will will say what happens to the income. However since you own 61%, then you should probably receive 61% of any rental income. 39% would go to the trustee.

You should get legal advice about moving out completely and renting it as this could be deemed abandonment and may mean the life tenancy is terminated, see:
Hurley v Hurley (1947) 75 CLR 289;
Pagano v Ruello [2001] NSWSC 63.

If you want to sell the propety you should be able to do so, but this will terminate the Life Tenancy and there may be CGT implications, however if it is your main residence then there may be no CGT consequences, check with your tax advisor. Both you and the Trustee would be on the contract of sale and you would need to organise the sale with them.

 

[The Mop]

Thanks again for your expertise, Terry.

The house is a sort of duplex made of two units, but with no mention of that on the one title.
It has two letter boxes, two flat numbers, two electricity counters but only one water meter.
The trustee has one flat, and I’m living in the other one.
This situation looks absurd because as part-owner and life tenant over the one title, it looks like I can ‘abolish’ the trustee’s flat, remove the flat numbers and also one of the letterboxes.

A solicitor friend of the deceased lady’s relatives says that if her flat is leased, the trustee will pocket the rent for her estate.
I’m preventing that with my life tenancy because there’s nothing in it for me and I’ve got the support of the deceased’s nieces who don’t want her flat touched.
We’re all getting on very well, but the lady’s elder brother did plan to move into her flat for free until he found out that I had life tenancy over it.

Below are the clauses of the Will relating to the income.
I’ll try to be back tomorrow.
Many thanks again.

 

[Terryw]

That part of the will doesn't say anything about income.

If there is only one title then you and the trustee hold it as Tenants in Common (as the shares are unequal it must be tenants in common rather than joint tenants). This means you both possess undivided shares. which means that the trustee owns 31% of your unit and 31% of the other unit. So you demolising the other unit would result in you losing out as well as the trustee.

Assuming the two houses are equal sizes then you are living in 50% of the property. You own 61% so if the other half is rented you would be entitled to a portion of that rent. Since you are using 50% for yourself you would only get 11% of the rental income (my maths is probably wrong!) with the remainder going to the trustee to be held on the terms of the trust - probably for your neices from what you have written.

 

[Terryw]

Err, it couldn't have been held Joint tenants as property held as JT would pass to the survivor and not form part of the estate.

 

[The Mop]

I meant ‘abolishing’ meaning leaving it as it is but removing the flat numbers and one letterbox so as not to have two separately identifiable flats.

I’ll look further in the Will for what it says about the income.

 

[Terryw]

Sorry I misread abolish for demolish!

But that wouldn't change anything Ithink.

 

[The Mop]

Thanks Terry, and sorry again for the time since.

New stunt today, the trustee isn’t going to pay off the mortgage because they say that the estate has incurred tax because of the superannuation payout.

I thought that superannuation payments for over 60’s were not taxed.
Is there something like a devious tax on the estate instead ?

Thanks for your troubles.

Unfortunately the receipt of funds from xxxx's Superannuation by the estate has resulted in the estate incurring a taxation liability. Unfortunately currently there are not sufficient funds in the estate to enable the payments of both the mortgage and taxation debts.

 

[Terryw]

Super is complex. super complex.

It can be tax free if it is left to a dependent. Other than that I think there are tax issues.

 

[Terryw]

Here is a link to an article in todays SMH

Avoid a tax liability
Annette Sampson
August 10, 2011

Read more: http://www.smh.com.au/money/super-and-funds/avoid-a-tax-liability-20110809-1ijn1.html#ixzz1Uj0M3eBq

 

[Felis]

Hi The Mop

Doing an internet surf I came up at this forum...I am also sharing tenants in common with PT Qld & find myself confused of my rights.
They seem to be making demands of who should pay for what on the property (mostly me) but they have not established any co-ownership agreement, let alone explained my ownership rights after receiving it thru inheritance. I am at present seeking my rights. All I can say is do not agree to anything they suggest in writing or it will be most likely be regarded as written consent by you who maybe confused as to your personal rights. Their job is to keep their part of the estate (they represent) as financially viable as possible & most likely know that anything they request & you may agree to (even if not confidently) will be regarded as written consent & can be used as proof. Advice: seek outside separate legal advice if possible before agreeing to anything. Do not let them bully you...& mention the word bully (they hate it). I am at present looking at channels where this sort of legal advice may be free esp when dealing with gov't bodies. I will let you know of my progress if interested.
PS...yes, I had to pay late council fees as PT failed to send me my part of the bill on time...I now have council send a bill to me separately to avoid this in the future.

 

[The Mop]

Thanks Terry, super complex and devious with this lovely quote from the Herald's story:

The Tax Office has now spelt out that when you die, your ''pension fund'' ceases to exist unless you've organised for your pension to revert to your spouse or another eligible dependant.

More of it in this quote from the Queensland government employees' super fund:

QSuper does not deduct tax from lump sum death benefits when they are paid to a personal legal representative. However, your personal legal representative must deduct tax from any amount paid to non-dependent beneficiaries.

I haven't found anything more since about what the will says about income, but I’ll try to post the remaining pages soon.


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And thanks, Felis, and my best wishes in your dealings with the public trustee.

My situation is clearer than yours because the will says that I'm liable for the rates and upkeep of the house.
I'm preventing the trustee's part of the house from being leased with my life tenancy, so there can't be any money from that side for the upkeep or anything.
I avoid any dealings with the trustee, except for pushing them to pay off the mortgage.

I think that only allowance recipients can get free legal advice to deal with government departments.
You’ve landed at the right place in this forum because there are very knowledgeable people here.
The ombudsmen and such are just useless decorations to impress the peasants.
Government departments don’t cause each other troubles because they’re feeding at the same trough … the taxpayer’s table.

I'm also on the Gold Coast, so I'm dealing with the same bunch of apprentices.
About a month ago, the trustee sent me the original water bill.
Does the council send you duplicate bills without charging for them ?

These copies of three emails listed by date make it look like the trustee is just improvising:

9 June 2011

Dear Mr Xxxx,

Thank you for your recent email.

I am please to advise that our Office now holds sufficient funds in the estate to pay the remaining balance on the mortgage. We have advise the mortgage centre at Xxxx Banking Corporation of this advise and they are currently calculating a payout figure for the estate.
Xxxx Banking Corporation have advise our Office that they require a Request to Release form to be completed and signed by all borrowers of the loan. They are currently preparing this form on our behalf and we will contact you once it has been received as your signature is required on this form.

Our Office looking to make arrangements with the other beneficiaries of the estate to collect the specific bequests in which they are entitled to receive.

I will contact you shortly when the Request to Release form is received by our Office.

Kind Regards

11 August 2011

Dear Mr Xxxx,

Thank you for your email.

Unfortunately the receipt of funds from Ms Xxxx's Superannuation by the estate has resulted in the estate incurring a taxation liability. Unfortunately currently there are not sufficient funds in the estate to enable the payments of both the mortgage and taxation debts.

I have referred this matter to my manager for consideration on how this matter can be resolved.

I will advise you as soon as some direction is received.

Kind regards

19 August 2011

Dear Mr Xxxxx,

Thank you for your email.

Unfortunately, notification of the taxation debt on the superannuation was received after my last correspondence with you regarding the payment of the mortgage.

I have received approval from our management to pay the mortgage. The estate will consider how to deal with the taxation debt after the mortgage is discharged.

I have contacted the mortgage section of the Xxxx bank to provide the estate with a payout figure.

Kind Regards