The Dynamics of a Statutory Trustee
What is a Statutory Trustee?
What is the Role of a Statutory Trustee?
Important Issues to Consider
What is a Statutory Trustee?
A Statutory Trustee is generally a person or persons appointed by an order of the Court to sell real property in Queensland (pursuant to Section 37 of the Property Law Act 2023) or other Australian states.
Relevantly for the sale of real property, the Property Law Act 2023 in Queensland provides specific considerations in deciding to either appoint or remove a Trustee and any order that the nature of the case requires including:
an order directing the Trustee as to the terms and conditions on which the sale is to be carried out;
an order directing the distribution of the proceeds of the sale in a way stated by the court; and
an order that the remuneration of the Trustee be paid from the proceeds of the sale.
What is the role of a Statutory Trustee?
In general terms, the role of a Statutory Trustee is to co-ordinate the sale of the property pursuant to the specific terms of a Court Order where the Trustee was appointed and distribute the net proceeds to co-owners.
In more specific terms, the role of the Statutory Trustee is to:
Secure the property
Prepare property for sale
Arrange formal valuations
Co-ordinate the sale process and marketing campaign
Deal with various statutory bodies (body corporates, councils, utilities)
Deal with encumbrances (mortgages, caveats, registered leases etc.)
Deal with tenants and recalcitrant occupants
Address statutory and other compliance issues
Disburse the net proceeds of sale to the beneficiaries
Consult with external parties, such as legal advisors of the parties or other stakeholders
Important Issues to Consider
A court application is required to appoint a Statutory Trustee. Before any court application is prepared, it is important to consider the steps involved and key aspects of the proposed appointment/order.
One important point to highlight is an appointment of a Statutory Trustee does not necessarily mean a property will be sold under forced sale conditions (unlike a mortgagee sale).
Other key practical considerations might include:
Engaging a solicitor who is suitably experienced in advising and drafting Statutory Trustee applications.
Adequately balancing the competing interests of the disputing parties, to minimise the level of debate over the appointment itself, and the essential terms. If not properly considered, this can cause unnecessary delays, increase the costs and reduce the net proceeds available to the parties.
Ensuring the proposed terms are not too restrictive in terms of the powers provided to the Statutory Trustee otherwise it may be counter productive.
Ensure there is clarity as to the payment of the Statutory Trustee’s costs and order of payments in the Order.
Whether the legal interest is aligned with the parties understanding of the beneficial interest – it is not uncommon for one co-owner to assert a greater share of equity in the property.
Considering the interests of other parties who may not be on title but may hold or assert an equitable interest in the property.
Independence of the person proposed to accept the role as Statutory Trustee (preferably someone external to the dispute).