Land Trust

Summary of land trust (management-type)

Registration of land
By transferring the land title under the name of the trust company, it would prevent any encumbrances on the land when undertaking the development business and it would be possible to undertake stable business by barring any compulsory action against the trust assets.
Fund management
When undertaking the fund management through the trust account, it would have far more strength against the debts of applicable business of the contractor and the third party debts compared to have the fund management done by other business entity that it would be possible to secure the trust of clients and purchasers of realty sales with the stable collection of loan credit and clear fund management.
Management of development right
The trust company is transferred with the authorization of the development business to enter into the contract for business right management and sales contract that the stable edvelopment busines scheme can be maintained until the business is completed.

Strengths of land trust (management-type)

Enhancement of business stability
Establish a stable business scheme between the parties by having the trust company with the mutual trust and public trust to set forth the trust contract under the stipulation of grantors and a construction company in a way of sharing the roles for business management and company in a way of sharing the roles for business management and undertake the position of contractor until the completion of the business.
Individual accounting management following the land trust business
Since the relations with other businesses of the contractor is cut off through the change of the main body of the business, the risks of provisional garnishment on credit and others on the business site and sales income that may be factors on fund operation and management and recovery of loan credit may be hedged in advance.
Improvement of possible realty sales
The trust company becomes the party to the sales contract that it may display stable business scheme to the clients and purchasers and it may improve the rate of sales effectively thereto.
Prevention of business delay
Prevention of business delay / It may prevent the personal delay, violation of regulations, or unjust conduct from its origin as well as prevent the delay in completion or tenancy or others due to the unexpected dispute between the construction company and contractor in advance (register for conserving the name of the trust company) and enjoy the practical authority of interested party.
Acquisition tax, registration tax and non-taxation of company
Acquisition tax, registration tax and non-taxation of company / Even if the business site is modified under the name of the trust company by applying the non-taxable income for acquisition registration for the formal title under Article 110 and Article 128 under the local Tax Act that there will be no separate
Possible for advance sales on commercial realty
Under the implementation of the “Act on Realty Sales of Buildings and Improvements”, the advance sales of commercial realty would be available for the following cases
  1. i)Entering into trust contract and agency work contract with the trust company
  2. ii)Use of guaranteed insurance product
  3. iii)Possible only when jointly guarantee by two construction companies after completing 2/3 of frame work
Therefore, the management-type land trust business would enable advance sales on commercial realty and stable cash flow.

Business structure and work procedure

Business structure Chart
work procedure Chart
  • Construction Agreement
    between Client and
    construction company
  • Business Agreement
    between Client and
    construction company
  • Permit for
    construction of land
    (or business plan approval)
  • Land trust contract
    (modification for
    business bodies)
  • Realty sales,
    completion and
    settlement

Major contents on business agreement

Procurement of business fund
Unless otherwise having separate stipulation, all funds required in a business is procured under the name of the grantors and the construction company would cooperate to this matter.
Disposition of taxes and dues
Taxes and dues imposed in accordance with the business undertaking and various payments resulted from business related permits and licenses are paid by the grantor in accordance