“By the time it comes to settle, they can’t get finance because that lender no longer does SMSFs or their fund balance isn’t enough or the lending [requirements] have changed,” Ms Bright told SMSF Adviser.

“Just because you can get a loan today for your fund, doesn’t mean that when your property is finished in six months that loan is still available.”

Buying off-the-plan unconditionally can leave trustees at the “highest risk of drama and nightmares”.

Ms Bright said she recently had a trustee contact her in desperation after they bought an inner city Brisbane property off-the-plan unconditionally.

“You can’t get finance approval to buy off-the-plan for SMSFs, so they had no finance approval and they were due to settle in two weeks,” she said.

The property was located in a part of Brisbane where lenders are hesitant to lend because of the large amount of units being built in that area.

“Their valuation came in at $40,000 short and the lender won’t give them more than 55 per cent on this building and they are $30,000 short just to settle,” Ms Bright said.

“If they don’t settle, they lose their $38,000 deposit and they’re liable to be sued by the developer for up to two years if they have to resell that property for less than what they bought it for.”

Ms Bright said the property was recommended to the trustees by the financial adviser who set up their SMSF.

“The broker was in-house. It was all in-house so they actually paid for financial advice, they paid for the SMSF, then they bought the property which no doubt the financial planner would have been paid a commission on and now they can’t settle. It happens all the time,” she said.

“I don’t think some advisers and accountants understand how dangerous it is for their clients to do this.”