Dealing With Trusts

Working with properties, a key consideration is identifying who 'owns' a property. That much seems simple. Second to this, we identify who has a relationship to a property. Owners are ultimately responsible for council rates, but we can flag others as ratepayers. In the world of deceased estates, corporations, power of attorney, SMSF ownership and just general complicated ownership situations, Trusts are worth having a look at. Straightforward to a junior rates officer, but ahhh, a senior rates officer knows there is more to the ownership record passed through from government than first appears!

"ATF" is a term which shows up on property ownership records rates officers receive. Those new to Rates commonly misunderstand the term when it comes to property ownership. Do a quick check of your ownership files, and I'll bet you have a few there. "As Trustee For", or "ATF", appeared on the title because property contract law stipulates that contracts stipulate that where a trust is involved, the trustee acting in their capacity as Trustee is identified - this is not the same as ownership. Think of this as the director of a company signing a contract to buy a grader. Who is the owner of the grader - the director or the company?

In other words, if ownership of a property comes through to a council as "Bob Johnson ATF Bob Johnson Trust", then WHO is the owner? If you guessed "Bob Johnson", you would be wrong. And if you chose "Bob Johnson ATF Bob Johnson Trust" you would be wrong as well, because such an entity does not exist. "Bob Johnson" exists, and so does "Bob Johnson Trust", but not "Bob Johnson ATF Bob Johnson Trust". Why, then is this written on the contract and carried through to the title? Contract law, that's why.

Rates Officers are sticklers for accuracy, and this is an example where that matters. When ownership records come through reading "Bob Johnson ATF Bob Johnson Trust", an experienced rates officer recognises that contract law indicates Bob Johnson (a person and trustee of Bob Johnson Trust) was acting on behalf of the Bob Johnson Trust (an entity, and legally seperate from Bob Johnson). Wherever Trusts are concerned, contract law tends to want to know the trustee who entered into the agreement on behalf of the Trust. Recording the details on the assessment record would then identify "Bob Johnson Trust" as the owner - the sole owner (very important!) - and Bob Johnson as "Trustee". Why? Because rates requires ownership details, not the details of who signed the contract. So yeah, two different identities need to be added to the property. Its a pain, but accuracy matters.

We all have a few that slipped through the net - get your rates officer to do an audit and get these niggly ownership items resolved, because accuracy matters.

And hey, if accuracy matters to your council - contact us. Accuracy is what we do.