SMSF LRBA Lawyers for Commercial Property
Legal work for self-managed super funds borrowing to buy commercial property under a limited recourse borrowing arrangement (LRBA).
- Custodian company and bare trust deed
- Contract review and conveyancing in the correct names
- Lender documents and independent legal advice certificates
Limited Recourse Borrowing
What an LRBA Is
An LRBA is the only way an SMSF can borrow to buy property. The fund borrows, a separate custodian holds the property on trust for the fund, and the lender can look only to that property if the loan is not repaid.
Because the property sits in a bare trust until the loan is repaid, the contract, the trust deed, the custodian company and the lender's documents all have to match - the same asset, the same names, signed in the right order. Most LRBA problems trace back to a document signed too late or in the wrong name.
Getting the Structure Right
What the Documents Must Line Up
Each of these points is settled before exchange, not after.
Single Acquirable Asset
The loan must fund a single asset. Where a property sits on more than one title, whether it counts as one asset needs checking before contracts are signed.
Bare Trust Deed
The custodian holds legal title on trust for the fund. The deed must identify the asset and the fund correctly and be signed before exchange.
Custodian Company
Usually a special-purpose company, separate from the fund's trustee, set up only to hold the property until the loan is repaid.
Business Real Property
Premises used wholly and exclusively in a business. This is what allows a fund to buy from, and lease to, a related party.
Related-Party Leases
A lease back to a member's business must be on arm's length terms - a written lease, market rent, and rent actually paid.
Lender Requirements
Bank loans come with their own requirements for the custodian and guarantors. Related-party loans must be on arm's length terms.
Step by Step
How an SMSF Commercial Purchase Runs
The order matters. This is the sequence we work to.
Confirm the Fund Can Buy
The fund's trust deed must permit borrowing and the investment strategy must cover the purchase. The accountant or adviser confirms this first.
Set Up the Custodian
The custodian company is registered and the bare trust deed is signed before contracts are exchanged.
Review the Contract
We review the contract and confirm the purchaser is named the way the lender and the bare trust require.
Lender Documents
Loan agreement, mortgage and guarantees are reviewed, with independent legal advice certificates for guarantors where the lender asks for them.
Settlement
The deposit and balance come from the fund, title transfers to the custodian and duty is paid.
After Settlement
A lease on arm's length terms is put in place if a related business occupies. Once the loan is repaid, the property can move from the custodian to the fund.
Our fixed fees for SMSF commercial purchases and custodian set-up are set out on our pricing page.
View Our Fixed FeesWhat Changed on 10 August 2026
From 10 August 2026 an SMSF can no longer enter a new LRBA to buy residential property. Commercial property and other business real property are not affected.
Residential LRBAs entered before that date continue and can generally still be refinanced, and a fund can still buy residential property outright where no borrowing is involved. For funds that want to borrow, commercial property is now the path, which puts more weight on getting the business real property and leasing rules right.
Other SMSF property services we provide.
Frequently Asked Questions
Can my SMSF still borrow to buy property?
Can my SMSF buy my business premises from me?
Can the fund lease the property to my business?
Does the custodian need to be a separate company?
Can borrowed money be used to renovate?
What happens when the loan is paid off?
Talk Through Your SMSF Purchase
Tell us about the property and the fund, and we will outline the documents needed and the order they need to be signed in.
Book a Free Consultation