Selling a property owned by a family trust can be complicated if you don’t follow the correct steps. If you're thinking about doing this, it's important to understand the process beforehand.
Talk to the Trust’s Lawyer
Every trust is different, based on its trust deed. Start by speaking with the lawyer, as they’ll understand your family’s situation. They can check if the property is allowed to be sold.IRD Number and Tax Implications
Make sure the trust has an IRD number — it’s needed for the sale. Also, check with an accountant about any tax issues. Tax may apply depending on when the property was bought and whether it’s the main family home.Trustee Agreement
All trustees must agree to sell the property. The lawyer will prepare a resolution (a formal agreement), which all trustees must sign.Choosing How to Sell
If you want to sell privately, the property must be valued by a registered valuer (required by law). Private sales can save commission costs but also carry risks.
If using a real estate agent, all trustees must agree on who to appoint. You can choose one or two trustees to manage the process, but everything should be documented properly.Legal Duties
Trustees have legal responsibilities. For example, selling the property for too low a price could be a breach of duty. All decisions and agreements (like choosing an agent or setting the sale price) must be recorded and signed by all trustees.Sale Process
Once the sale price and terms are agreed, all trustees must sign the sale and purchase agreement. The deposit will be held in a trust account by the lawyer or agent.
After the sale settles, update the trust’s asset register and deposit the proceeds into the trust’s bank account. Funds will then be used as outlined in the trust deed.