The member will be the property manager unless a third party property manager is appointed (by the member).
Collection of Rent
- Rent will generally be payable by the tenant(s) on a quarterly basis (if monthly payments are requested, the solicitor will need to be advised and the lease amended).
- The responsibility of collecting the rent will lie with the property manager. Where the member is the property manager, rent is received by GPC SIPP Trustees Ltd, on behalf of the member/s, from the tenant(s) by means of a standing order into the SIPP bank account. It is the responsibility of the Property Manager to contact GPC SIPP in order to ascertain whether the rent is paid to date.
- Payment of a rent at a commercial level must continue even after any loan has been repaid.
- In cases of non-payment, GPC SIPP Ltd is required to vigorously pursue the tenant(s) for rent arrears. GPC SIPP Ltd will utilise all legal means to recover any rent arrears.
- If the tenant and the landlord are connected and rent remains unpaid then GPC SIPP, as Scheme Administrator, has an obligation to report the non-payments to HMRC, who may impose tax charges.
- The lease must be drafted on a commercial basis with a minimum three year term (although it will need to be longer where borrowing is required to assist the purchase).
- If the tenant and the landlord are connected (or if the lease specifies) all reviews must be carried out by a qualified surveyor to determine an appropriate commercial rent and value for the property.
- For members whose SIPP’s are in Drawdown, the rent review report may be used for the purpose of the SIPP’s review (to determine the maximum and minimum income drawdown limits) provided it was completed within the 12 months preceding the review and includes an open market property valuation.