In addition, the tenant may be a related person of the SMSF if the property meets the definition of business real property. For example, a small contractor may acquire a commercial property through his SMSF and then have the superfund re-leased to the company run by the members of the SMSF. If a member rents commercial properties to his SMSF, seven additional rules apply. Special rules apply when a SMSF is rented to a “linked party.” Our SMSF Commercial Lease complies with the seven rules of the strict Superannuation Act: Closing the rental documentation before giving the tenant ownership of your premises If the members/trustees of a SMSF own commercial properties within their SMSF and want to re-rent it to a company that is a party related to the superfund, the property must fit the definition of “Business Real Property” (BRP) according to the SIS Law. If you are considering borrowing to invest in a commercial property for your SMSF, you should review the fund`s investment strategy before purchase. Assets must be part of the investment strategy, including asset diversification, liquidity and maximizing returns for fund members. 3. have a written commercial lease – on commercial terms; and your tenancy agreement should require the tenant to provide the lessor with copies of all insurance policies in progress at the beginning of the lease and when the policies are renewed. Disclaimer: The content of this article is only general information.
GeersSullivan recommends that you get professional advice before taking action based on the content of this article. Please contact our Superannuation Manager Helen Cooper on (08) 9316 7000 if you would like to discuss your specific circumstances. Control of the tenant`s performance of tenancy obligations A tenant receives certain legal rights at the time of the granting of ownership of the premises. If the terms of the tenancy agreement are not negotiated and concluded before the tenant moves in, this can cause problems on the way. The tenant is also required to continue to meet all other conditions of the tenancy agreement.