The Legal Protection Of The Investors Of The Real Estate Investment Trust

The Real Estate Investment Trust (thereafter referred to as REITs) is a brand-new pattern of real estate financing. The trust institution(the trustee) ,should gather the capital of the investors through public or private ways, and ,at the wills of the investors, invest in the area of Real Estate and the related fields, for the benefit of the beneficiaries. Usually, the investors of the REITs are the beneficiaries. However, the new financing pattern in the Real Estate will lead to some kinds of legal risks because of the lack of the special laws and regulations. In the essay, the author hopes to open out the risks of the investors by analyzing the valid laws and regulations, such as the trust law, the tax law, the macroscopic readjustment and control of the real estate and some other legal system. Thus, the essay will establish a new legal system of the protection of the investor of the REITs.The essay is divided into four parts. In the exordium, the essay generally introduces the background, nowadays materials and the meaning of selecting this topic.In the first part, the essay briefly makes an introduction of Trust, Real Estate Investing Trust and enumerates the legal system of it, especially laying emphasis on the protection methods.In the second part, the essay focuses on the most essential right——the beneficial right of the investor, with discussion on the nature of the right, the content of the right and the risk of transferring the right. By comparing the opinions of the common law system and the civil law system, the essay holds an opinion that the beneficiary right should to be a special right in rem. As far as the transferring problem is concerned, the author raises the questions of the validity of the system.In the third part, the essay mainly analyzes the internal risks and the external risks, such as the risk of the trustee, the risk of independence of the trust property, the risk of the tax burden of the REITs, the risk of the Real Estate Industry and finally the risk of the supervision of this special area.In the fourth part, the author tries to make up a multidimensional legal system for the sake of the investors of the REITs, in the areas such as the trust law, the trust business law, the real estate law and the tax law.As we all know, the basic values of the trust itself are freedom and efficiency. However, the trust law system should assume the obligation of guaranteeing the healthy development of the REITs at the time of innovation on Real Estate financing. Finally, the author hopes to make up an all-around and valid protection system of the investors of the REITs.