There are a few guidelines that the TIC: Delaware Statutory Trust (DST) holds, and for one it permits a very flexible approach to the design and operation of these entities.

There are also a few restrictions held by the TIC: Delaware Statutory Trust (DST), including that the trustee cannot renegotiate the terms of the existing loans and cannot borrow any new funds from any party. They are also limited to making capital expenditures with respect to the property.

Structure

One of the most important aspects to the TIC: Delaware Statutory Trust (DST) is its structure. Some people at first considered that the structure was only going to be appropriate with single tenant, leased properties, but now its use has been expanded to include a great deal more. It now includes offerings that involve a portfolio of multi-tenant properties.

Advantages

There are certain advantages that the lender of this trust would receive, including that they have only one borrower. Under the TIC: Delaware Statutory Trust (DST), the creditors of any beneficial holder will not have any rights to property that comprises the corpus of the trust.

Risks

Just as there are advantages, there are also certain possible risks, including the inability of the DST to actively manage the property, inability to refinance at the end of a loan term, and the risk that the IRS challenges or denies the 1031 tax treatment for this structure.

These risks need to be addressed properly, and there are ways to get around every risk, but any lender will need to be very careful here and make sure that they are going about it properly. It is also important that the lender keep in mind the fact that these requirements are really only basic guidelines and centerline must review in detail the structure of each loan to a DST prior to accepting such loan into any of its pools, not only to ensure their own safety but the safety of the lender as well.

For more information on this, you can use the Internet or you can speak to a tax preparer or other experienced tax consultant, who will be able to discuss the details with you and help you become clearer on the issue at hand.