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Trustees, settlers and beneficiaries

June 10, 2011
By SYLVIA HELDRETH, Real Estate Law

Q: I am a new member of our condo board. I think I understand most of the issues we face but I'm completely confused about units that are held in trust. Who can vote for these units? Who has the authority to participate in meetings? Who can live there? Is it like a corporation?

A: A trust is an agreement, not an entity like a corporation or partnership. This agreement is between the "Settlers" "Trustees" and "Beneficiaries."

The settler conveys property to a trustee who agrees to hold the property "in trust" for the beneficiaries. The trustee deals with the property as if the trustee were the absolute owner but his or her authority is limited by the terms of the trust agreement and must be exercised in the best interests of the beneficiaries.

The trustee is designated on the deed of conveyance and in the trust agreement. This person is the owner of the property and a member of the association. Beneficiaries may be entitled to act on behalf of a residence also but an individual claiming to be a trust beneficiary should provide documentation as evidence.

The beneficiary may occupy the residence subject to association governance. The board should require the trustee to appoint a "primary occupant" for the residence. This person should have the same use rights as any other resident. Anyone else claiming use rights through the trust should be deemed a tenant or guest (as the case may be) and subject to applicable restrictions. To determine eligibility, the board should request copies of the relevant portion s of the trust for review.

Your board should request that the trustee provide a proxy appointing the beneficiary as the proxy holder. if the beneficiary is to vote. The board may not need to permit a beneficiary to participate in meetings since the beneficiary is not the "owner" or member. If a beneficiary makes a request for official records, written authorization from the trustee is sufficient evidence to comply with the request..

As with any issue that may require clarification, consider seeking the advice of an attorney who is knowledgeable in the issues of community associations, especially trusts.

Attorney Sylvia Heldreth is a certified specialist in real estate law. Her office is located at 1215 Miramar St., in Cape Coral.

This article is not intended as specific legal advice to anyone and is based upon facts that change from time to time. Individuals should seek legal counsel before acting upon any matter involving the law.

 
 

 

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