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PROPERTY HAS ADDED RESPONSIBILITIES

All owners need to consider public liability including SMSF Trustees

The Australian Taxation office (ATO) has warned trustees holding business real property in their self managed superannuation funds (SMSFs) that they have obligations to keep the property free of faults or risk the possibility of being sued.

The reminder stems from a recent decision handed down in the District Court of NSW where a property owner was found liable for the death of an electrician whose services were used to remove an old hot water system at the premises.

In the case of Giovenco v Dick, the electrician died from electrocution when he came into contact with a wire from the existing hot water system that was exposed.

The judge ruled it was reasonably foreseeable from the state of the hot water system in question that someone coming into contact with it could be electrocuted, and as such the owner had breached his duty of care.

In its newsletter, the ATO pointed out that the property owners have a duty of care to everyone that enters their premises.

"If you own business real property in your SMSF you should make sure you are aware, to the best of your ability, of any hazards on your business real property.  If any hazards do exist, you should have them fixed," the regulator warned.

"The super laws provide people with the ability to bring a claim against the trustees of SMSFs to recover loss and damage, which may include action of negligence," the ATO said.

In a further piece of advice to SMSF trustees, the ATO said they should consider taking out public liability insurance for the business real property in the fund.

If you have any questions, or would like to discuss your specific circumstances, please do not hesitate to call us.