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 38 of the Property Law Act) or other Australian states. The Property Law Act provides:
(1) Where any property (other than chattels personal) is held in co-ownership the court may, on the application of any 1 or more of the co-owners, and despite any other Act, appoint trustees of the property and vest the same in such trustees, subject to encumbrances affecting the entirety, but free from encumbrances affecting any undivided shares, to be held by them on the statutory trust for sale or on the statutory trust for partition.
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.
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).