When a trust owns a property the names of the trustees are listed on the title of the property. If the trusts property is being sold then, for a contract to be valid, it does need to be signed by all the trustees.
I regularly see instances where Sale and Purchase agreements are signed by some of the trustees (usually the settlors who initially formed the trust) but they fail to include the independent trustee’s signature. If in doubt you should look at the title of the property and make sure that all parties listed as the owners have in fact signed the contract.
You should also be aware that all trustees really should be involved in the decision making process of a trust – an independent trustee should not merely “rubber stamp” transactions.
Proper procedure for selling a Trusts Property:
- Have a meeting of all trustees to resolve to sell the property, appoint an agent/sell privately.
- Record the decisions made at the trustee meeting in minutes.
- List the property for sale.
- When presented with an offer hold another trustee meeting to discuss whether to accept the offer, pass resolutions, get legal advice and if all trustees are in agreement then all sign the contact.
Our Auckland Lawyers are available to offer advice and assistance on Trust matters. Please contact us if you have any queries.