Fair Oak Trustees takeover of Title Trustees. What does this mean for the industry when such a merger is planned?
We look into the merger with a fine toothed comb. So, who is Title Trustees and who is Fair Oak Trustee? Title Trustees was set up for the ever expanding Asian property market. Set up in 2009 and incorporated a year later, Title Trustees is a trading partner of the world renowned and respected service of Hutchinson & Co Trust Limited.
Of course any one knows Hutchinson. Incorporated in 1981 and fast established as one of globe’s most successful companies to secure property assets. Hutchinson pioneered asset and property management across the whole of Europe in the boom years of the 90’s.
So what is role of a ‘trust’ in the property sector?
A trust is an arrangement in which one party holds property for the benefit of a third party, usually the investor (or subscriber) termed as the beneficiary. Trusts are vital for the success and credibility of the latest style of investment platforms containing multiple investors such as crowd funds.
- Tax Advantages.
- Keeps the property assets and cash out of the hands of the owners of the investment platform.
- A Trust is legally bound to operate in the best interests of the beneficiary.
- A Trustee possess special knowledge about the investment allowing the beneficiaries to be ignorant of such matters and still be safe to invest.
- A Trustee will full fill the terms of trust and ensure the property and the cash flow generated by the property asset will be given to the beneficiary.
What about Fair Oak Trustees?
Well they seem to be backed by the same powerhouses in the industry that sent Hutchinson to the height it is today. What was their proposal for providing the ultimate in security for real estate investors? We spoke to Mr. Mark Ashley Bevan, the director of Fair Oak to comment directly on his idea of total client security.
“Firstly, Fair Oak doesn’t deal with off plan or pre-construction investment platforms. Only when the property platform is built, running, returning income and then Fair Oak may consider a trust service. Also, Trusts with less resources do not address the fact that clients are at risk twice when they make an investment”
“Firstly when the client makes the capital investment, and then of course when it comes to liquidating the asset once the fund matures”
“Fair Oak will first insist on securing the deeds to the properties. By default we are assured the asset be free of emcumberance or debt. The investor no longer needs to trust the management of the investment company. The property asset is paid for, cannot be remortgaged or sold while the deeds are secured by Fair Oak.
What about management of the properties and mangement/disbursement of the rental income?
“Fair Oak will bill the investors an agreed management sum on a yearly basis. This is a fixed term rate so invstors can easily plan to cost it in their investment budget. It doesn’t just buy you our service, it buys our expertise. This will cover the cost of property acquisition, management, advertising, rental tenants and payments. And of course, dealing with disbursing the rental income back to the clients. In some cases, for example one of our most respected clients, Realty Access and its Investors Club. The rental income is split, the Subscribers to Realty Access receive a cash amount, pre agreed at the end of every rental year as a dividend. This sum is guaranteed by way of upfront bond by Realty Access’s sales agents to ensure that if Realty Access failes to rent all the Subscribers property rights then Fair Oak will pay the bond to the client instead. This creates a unique security aspect for buy-to- let property investor with a ‘guaranteed stable rental income’. Every buy-to- let investors dream!
What happens to securing the investors funds at the point of sale?
“The only way to police all the sales agents is to commit to a joint venture agreement with the product company and allow us to set individual checks and balances within the sales agents organisation at the point of sale. So for example, again with Realty Access. Clients will pay into a separate client account under our control. These funds are inacessible to the staff of the sales company at the point of sale. These funds are then sent directly to the clients escrow account in trust with us here at Fair Oak. We will have received a copy of the clients investment proposal, we then reconcile with a clients receipt, access local agents bank reports the exact amount paid. Once due diligence on the sales sequence has been approved, the client will receive his deed to that exact amount held in escrow. Only then, once the client confirms receipt of the deed exactly as expected does the product company have the investment capital released into their control from escrow. So, the point of sale capital and asset are secured. That’s what you mean taking the risk out of investing.
“When its time for the propert assets to be liquidated, we freeze all current and future sales. Property assets are valued, sold in the most profitabe way for the investor and the total sales funds along worth the rental fund will be equally distributed to the investor. This is our job. Its what we wake to do every day of lives and its why the client pays his managment fee every year”.
So, in summary it seems that Fair Oak is bringing to the table a complete package where the public can “invest and forget” with total management of the funds and its cash flow. Many times we receive emails asking how do we know if we can trust what our IFA tells us? Or, how do we know when its time to get our return? With Fair Oak, the answer is simple…YOU DON’T NEED TO! Fair Oak secures the investment platform, the assets. Polices the cashflow and ensures payments upon maturity. Sure, its costs money to make money and Fair Oak currently charge 3% of the sum invested. But what price do you put on a guarantee of a return. And to free yourself from the worry of investing? Fair Oak make investing safe enough to be excited about the mid to long term prospect of securing your fututre and leaving a legacy for your children. To everyone here at Hamilton & Chase it would seem the perfect set up for the new and high net worth investor alike. As is heard often in the property investment market, “you just can’t buy that kind of experience”. Well now you can, consult Fair Oak Trustee’s for your overseas property management and for a fixed cost you’ll be buying a winning combination of resources that will enable the investor to invest and simply walk away without fear or trepidition. As a final note, we see that other countries lobbying for legislation to make this kind of tranparency and experience a legal requirement for all investment companies to prived to all non-high- net-worth investors. Until that time, the gold standard will remain, a British Trustee with a British bank and a UK registered investment company. *Some funds / accounts do not qualify for yearly rental yield divdends. Please consult your local qualifed investment advisor.