SMSF limited recourse borrowing arrangement. What to do when important information is unknown or unavailable.

By Mahjabeen Khan, Customer Support
 
This has been a question from Cleardocs customers for some time now, so I thought it would be helpful to address it in our blog. 

I recently joined the Customer Support Team at Cleardocs and have been assisting customers with questions about our products since August 2013. I've come to realise that customers feel more secure when they are referred to published information. It assures customers of the authenticity of information and if it’s displayed on the company’s website, it is reviewed and approved by subject matter experts.

Let’s look at the ‘Loan’ section on the SMSF borrowing interface. Help text guides the user how to complete the interface when information is unavailable. (for example, the loan amount, the loan term and the settlement date) 

Figure: 'Loan' section - SMSF borrowing interface

• The question: Let’s start with the questions in the form. The help text which pops up when you click the information icon, prompts the user to ‘type in xxxx (or something)’ when information is unavailable. Some customers get confused about the help text thinking that it applies to all the questions they don’t have an answer for. You can enter ‘xxxx’ in loan amount field, however, the loan term and settlement date, even if it’s an estimate must be entered. The settlement date must be in date format.
• The issue: On Maddocks’ advice, we generally warn our customers not to sign any documents which contain incorrect or only approximate information. As a result, customers are wary of presenting draft SMSF borrowing documents to the bank for review. Some customers have questioned why we need this information at all, at a stage where it’s not yet available.  
• The solution: The exception to the rule for not signing documents with incorrect information is the SMSF borrowing documents packages. Over the years, we’ve worked extensively with banks to tailor the borrowing documents to each bank’s specific requirements. Any documents you show to the bank or your client (if still in draft format) can be changed. The banks have provided this assurance.   

If you keep the above points in mind, this should satisfy the lender’s requirement. All our documents have been signed off by top 20 Australian law firm, Maddocks.

For more information on this or other SMSF matters,  just give us a call on 1300 307 343 or send us an email at support@cleardocs.com and we'd be more than happy to help.  

+Cleardocs Thomson Reuters