Refinancing Multiple Properties Held in a Trust: What to Plan For | NZ Legal

Refinancing a single property is straightforward enough. Refinancing several properties held in a family trust is a different exercise. There are more parties, more documents, more titles and more places where things can stall. If you are planning to refinance trust-owned properties, whether to release equity, restructure debt or move to a new lender, here is what to plan for.

Every Trustee Has to Sign, and That Takes Coordination

Unlike a mortgage in an individual name, a trust mortgage needs every trustee to sign. That sounds obvious, but in practice it is the single most common cause of delay.

Take a trust with three trustees: one in Auckland, one in Christchurch and one living in London. The Auckland and Christchurch trustees are easy. The London trustee is where the timeline stretches.

There are two separate sets of documents, and they have different rules.

The LINZ Authority and Instruction form. This is the form that authorises your lawyer to register the mortgage against the title. LINZ sets out who can witness it when the person signing is overseas, in its Authority and Identity Requirements for E-Dealing Guideline 2024. A notary public is one option, but not the only one. A New Zealand lawyer, an Australian lawyer or an Australian Justice of the Peace can also witness. The form can be signed and witnessed using an electronic signature, so this part does not necessarily require anything to travel.

The bank documents. The loan agreement, the mortgage and any guarantees are the lender’s documents, not LINZ documents, and the lender sets the rules. Many banks still want original wet-ink signatures on guarantees. Where that applies, allow two to three weeks for documents to travel out and back, and build that into your settlement date rather than discovering it at the end.

One more thing on signing. Independent trustees, usually a trustee company or a solicitor acting in that capacity, are entitled to review the loan terms properly before they sign. They will not simply approve what the settlor wants. Leave time for that review.

Personal Guarantees, and What You Are Actually Signing

Most banks lending to a trust will ask the people behind the trust, usually the settlors and often all the trustees personally, to give personal guarantees. It is worth being clear about what that means before you sign.

A guarantee puts your own assets behind the trust’s debt. If the trust cannot pay, the bank can come to you. That is the point of it, from the bank’s perspective.

A continuing guarantee covers all present and future obligations of the trust to that lender. It is broad. If the trust borrows more later, your guarantee can extend to the new borrowing as well. A limited guarantee caps your personal exposure at a fixed amount. Which one you are being asked to sign makes a real difference, so read it with your lawyer before you commit.

Lenders will normally require each guarantor to get independent legal advice and to produce a signed certificate confirming it. This is not a formality you can skip, and where several guarantors each need their own lawyer it is usually the biggest driver of both cost and time. Book those appointments early.

Independent trustees are often asked to guarantee as well. Many will decline, or will negotiate a limit, because signing means putting their own assets behind the debt. If your trust has an independent trustee, raise the guarantee question with them at the start rather than at signing.

Does the Trust Deed Allow It?

Before a bank advances funds to a trust, your lawyer will confirm that the trustees can borrow, mortgage the trust’s property and give guarantees. There is a common misconception here worth clearing up.

Under s 56 of the Trusts Act 2019, a trustee has all the powers necessary to manage the trust property, including all the powers of an absolute owner of that property. So a deed that simply says nothing about borrowing is not, by itself, a problem. What your lawyer is looking for is a restriction, not a grant.

Restrictions do exist. Some deeds limit borrowing, prohibit giving guarantees, or require the consent of beneficiaries or a protector first. Those need to be dealt with before the bank will settle, and they are the reason the deed review happens first rather than last.

If the deed does need changing, most deeds contain their own power of variation, and that is the normal route. It is a document your lawyer prepares, signed by the trustees, and it does not involve a court. Going to court is the fallback, not the starting point: under ss 124 to 126 of the Trusts Act 2019 the court can approve a variation on behalf of beneficiaries who cannot consent themselves, such as minors or beneficiaries not yet born, or dispense with a consent. That takes time and costs money, so it is worth knowing early whether it is needed.

Several Properties: Cross-Collateralisation and the Trade-Off

When several properties are mortgaged to the same lender, the bank will usually take an “all obligations” mortgage over each title. Each property then secures all of the trust’s debt to that bank, not just the slice of debt that relates to that particular property.

That keeps things simple while you are borrowing. The trade-off shows up when you want to sell one of them.

To sell a single property out of a cross-collateralised portfolio, the bank has to release that title. It will reassess the whole security position first, and it will usually require a substantial part of the sale proceeds to go against the overall facility rather than being released to the trust. In other words, selling one property may not put the cash in your hands that you expected.

If keeping the ability to sell individual properties matters to you, raise it while you are negotiating the refinance, not afterwards. Ask the bank whether the properties can be financed on separate facilities, and what it would cost. It is a much easier conversation before the loan documents are drawn than after.

Tenanted Properties: Tell Your Lawyer Early

If any of the trust’s properties are tenanted, flag it at the start.

Refinancing does not change who owns the property. The trust is still the landlord, the tenancies continue on the same terms, and nothing needs to be reissued to tenants. What does matter is disclosure to the bank. Most lenders want to see all tenancy agreements before they finalise loan terms, because a long fixed term affects both the valuation and how quickly the bank could realise the security if it ever needed to.

Bonds are a different question, and they only come up if you are also changing trustees at the same time, which trusts often do at a refinance. If a trustee retires or a new one is appointed, the people named as landlord on the bond record change. Tenancy Services requires the bond record to be updated whenever the landlord changes. The bond itself is not re-lodged. From 29 June 2026 this is done through Bond Hub, and the old paper change of landlord form is no longer available.

Use the Refinance to Review the Trust

A refinance brings all the trustees to the table in a way that ordinary property management does not. It is a good moment to look at the trust itself.

• Trustee succession: who takes over, and is that still the right person?
• Whether the deed still reflects what the family actually intends.
• Whether the memorandum of wishes is current.
• The vesting date: the Trusts Act 2019 sets a maximum duration of 125 years, but the terms of a trust can specify or imply a shorter one. If your deed names an earlier vesting date, and many older deeds name 80 years, that earlier date is the one that applies. It does not extend automatically. Worth checking now rather than discovering it later.

None of this is urgent in the way the loan documents are, but it is far cheaper to deal with while everyone is already engaged.

How Long Should You Allow?

Every refinance is different, and the honest answer depends on your lender, your trustees and your deed. As a general guide:

• A single property, New Zealand-based trustees, no complications: allow 4 to 6 weeks.
• Several properties, an overseas trustee, tenanted properties, or a deed that needs review or variation: allow 6 to 8 weeks.

What the process looks like

1. Step 1

   Trust deed review

   Your lawyer confirms the trustees can borrow, mortgage and guarantee, and checks for any restriction or consent requirement. If a variation is needed, this is when it is picked up.

2. Step 2

   Trustee consent

   All trustees confirm they are participating. Overseas trustees arrange witnessing. Independent trustees review the loan terms. Guarantors book independent legal advice.

3. Step 3

   Bank documentation

   Loan documents are issued, reviewed and signed by all trustees and guarantors. The bank’s solicitors prepare the mortgage instruments.

4. Step 4

   Discharge and registration

   On settlement, the existing mortgages are discharged and the new mortgages are registered against each title. Your lawyer coordinates this with both banks so there is no gap in security.

5. Step 5

   Funds advanced

   The new lender advances, the old loan is repaid, and any surplus is dealt with as instructed.

Ready to Take the Next Step?

If you are thinking about refinancing properties held in a trust, the earlier we are involved the smoother it runs, because the deed review and the trustee coordination are the two things that cannot be rushed at the end.

You can read more about how we handle these on our refinancing page.

This article is general information, not legal advice. Every trust and every lender is different, so please talk to us about your own situation.