The Statutory Trustee Process - From Stalemate to Checkmate

Owning a home, land or similar property with another person/entity is often the path of least resistance to entering the real estate market. However, with shared ownership comes shared decision making and over time personal opinions and individual circumstances can change. Disagreements may also arise, leading to a need to sell the property. If both parties are not on the same page and a sale becomes a matter of when, not if, it may become necessary to apply to Court, seeking the appointment of a Statutory Trustee pursuant to Section 38 of the Property Law Act 1974 (Qld).

As a co-owner you have a fundamental right to apply to the Court to sell a property and realise your interest.  Appointing a Statutory Trustee early in the piece may also increase the chances of avoiding a potentially more costly, uncertain and protracted outcome for both parties.

In this article, we will explore the decision-making process involved leading up to the appointment of a Statutory Trustee and provide a simple outline of some actions undertaken once appointed.

Prior to Appointment

• Engage a solicitor experienced in drafting statutory trustee applications to:

  • advise on the prospects of the Court appointing a statutory trustee to sell the property and the appropriate commercial considerations

  • advise you on any potential challenges to the court application and approach to resolving same (e.g. dispute over historical contributions and financial interest, equitable interests by third parties); and

  • draft the relevant Orders sought, affidavits and associated material.

• Seek the consent of a suitably qualified and experienced individual(s) to accept the role as Statutory Trustee(s). The appointment of two Trustees to manage the sale process is highly recommended.  We currently have two qualified experts for this role.

Post Appointment (Actions by Statutory Trustee)

• Secure the property and facilitate possession

• Engage legal representation to register Trustee(s) interest on title (this allows the Trustee(s) to enter into a contract of sale and sign the required transfer forms)

• Determine and write to all relevant stakeholders, including statutory bodies and any other parties with an interest in the property (e.g. Council, Utility Providers, Body Corporate, Mortgagee, Tenants etc)

• Collect and maintain detailed records of income generated by the property and any other receipts and payments that may be incurred

• Identify and address any urgent repairs that may be required to ensure statutory compliance

• Engage an independent property valuer

• Invite marketing submissions from local real estate agents and select an agent to market the property for sale

• Arrange for the relevant contract of sale to be prepared, with the specific provisions/special conditions

• Enter into a contract of sale with a suitable buyer after conducting appropriate marketing of the property (the disputing parties are usually not precluded from making an offer, unless the Orders specifically say so)

• Maintain effective communication with the owners/beneficiaries and their advisors throughout the process

• Consider and if appropriate seek amendments to the Order, for example where any terms of the Order may be impeding the sale process

• Consider tax consequences associated with the sale of the property

• If there is no dispute over the financial interest in the sale proceeds, attend to the disbursement of proceeds to the relevant parties in accordance with the specific terms of the Order

• If there is an unresolved dispute at the time of settlement, the Orders may direct that the proceeds of sale are held on Trust or to be paid into Court, pending resolution by the mutual consent of both parties or via further order of the Court.

The above is by no means an exhaustive list of all the steps involved, with each situation likely to require a tailored approach. Ultimately it is the implementation of the process that matters most, guided by qualified, experienced professionals.

QSAS are experienced in undertaking appointments as statutory trustees and have a vast network of professionals including property experts, project management firms, legal advisors, agents, and allied health connections to assist with a smooth sale process.

QSAS are also prepared to undertake these appointments, in certain circumstances, on a fixed fee basis to provide more certainty for all stakeholders.