Setting Up an Unlisted Property Trust

Property Trusts

Property TrustsAn unlisted property trust deals with a person’s property or properties through a written document that creates the concept of the trust itself. An unlisted property trust often, or usually, does not need formal registration like a will, but administers all the wishes of the property holder upon his demise.

Recent rules made by the government have rendered property trusts somewhat incapable of refinancing their short-term debts. More notably, refinancing done by foreign lenders, plagued with their own problems is also on the lower side.

The Sentinel Property Group lists additional information about unlisted property trusts.

Fair Valuations

Numerous unlisted property trusts have decided not to encourage investor redemptions on the principle that once someone buys a property, they would not generate the ‘fair’ value of those properties that the trust holds. Unlisted trusts stick to fair valuations with the hope that the situation improves over time to enable sales at prices that are somewhat closer to their respective book values.

In other words, such trusts are optimistic about the valuations that they themselves make.

Unlisted Trust Agreement

The legal agreement that binds the functioning of the trust is the most important document.

A lawyer who concentrates on such cases usually drafts an unlisted trust agreement. This comprises clear clauses and directions on how the trust will function. It will have a board of trustees who will execute their respective duties as specified in the trust agreement, to dispense of or to make suitable use of all properties. These may include both residential and commercial properties.

Board of Trustees

The Board of Trustees is the main executor of such trusts and the responsibility of running the Trust successfully lies fully on them. Similarly, they are accountable to the law and to the original owner of all properties if there is any mismanagement or fraud involved in running the trust.