Posted by Phillip Davies on June 3, 2016 in Escrow News, Uncategorized | 0 comments
Breaking News: 3rd June 2016
Fair Oak Trustees takeover of Title Trustees.
We looked into this merger with a fine-toothed comb.
So, who is Title Trustees and who is Fairoak Trustees Limited?
Title Trustees was set up for the ever-expanding Asian property market in 2009. Title Trustees is a trading partner of the renowned and respected service of Hutchinson & Co. Trust Limited.
Of course, any one knows Hutchinson. Incorporated in 1981 and fast established as one of the globe’s most successful companies to secure property assets. Hutchinson pioneered asset and property security across 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). Trusts are vital for the success of an investment platform containing multiple investors.
*Keeps the assets and cash out of the hands of the company owners.
*A Trust is legally bound to operate in the interests of the customer.
*A Trustee possesses special knowledge allowing the non-expert customers to still be safe to invest.
What was their proposal for providing the ultimate in security for real estate investors? We spoke to Mr. Bevan, the director of Fairoak to comment directly…
“Fairoak will only deal with an investment platform when it’s built, running, and returning income”.
“Trusts with less resources cannot protect the customer at both times of risk. That’s when they make the initial investment and when it comes to being paid out upon maturity”.
“Fairoak secures the deeds to all properties. We then know the asset be free of encumbrance 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”.
What about management of the properties and management/disbursement of the rental income?
“Fairoak bill the investors a small, fixed management fee that can easily fit into any investment budget. It buys you our service and our expertise. And of course, dealing with disbursing the rental income and resale profits back to the clients upon maturity. In some cases, for example one of our clients, Property Plus. The rental income is split, the Subscribers receive a cash amount, pre-agreed at the end of every rental year as a dividend from their sales agents*. This sum is guaranteed by upfront bond from those sales agents. If the property rights were not rented then the bond will be paid 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 investor dream.
What happens to securing the investors funds at the point of sale?
“For example with Property Plus again, customers will pay into a separate client account under our control. These funds are inaccessible to the sales company. These funds are sent directly to the trust with us here at Fairoak. Once due diligence on the sales sequence has been approved, the client will receive his deed to that exact amount held in escrow.
“When it’s time for the property assets to be liquidated, we freeze all current and future sales. Property assets are valued, sold in the most profitable 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. It’s what we wake to do every day of lives and its why the client pays his management 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.
We receive emails asking, “how do we know if we can trust our IFA”? With Fairoak, you don’t need to! They secure the investment platform. Police the cashflow and ensure payment upon maturity. Sure, its costs money to make money and Fairoak 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? Fairoak make investing safe enough to be excited about the mid to long term prospect of securing your future 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.
As a final note, we see that other countries lobbying for legislation to make this kind of transparency and experience a legal requirement for all investment companies to provide 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 dividends. Please consult your local qualified investment advisor.
TAKE NOTICE: Hamilton Chase is part of the Chase Hamilton Financial Services Group PLC. And as independent financial advisors the group strives to provide pragmatic, impartial research and advice into the financial services world.