Gday, I’m new to the board and was wondering if there is anyway of getting around the illegal aspect of a wrap in South Australia. I like the win-win situation that a wrap can create and my current tennents are good candidates. Any ideas or light on the subject would be greatly appreciated.
Cheers
NO
South Australians do lease-options instead.
Do some searches for lease options and there are lots of resources for them.
Some South Aussies might help also.
Cheers
skippygirl
)I would be going for lease-options as well. Less onerous in my opinion and pretty much the same result.
Robert Bou-Hamdan
Mortgage Adviser
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Comments made are of a general nature and should not be construed as individual advice.
© 2004 Mortgage Packaging Pty LtdThanks guys for the info. I appreciate it. What a shame theres no way around it. I would like receiving the initial deposit in the wrap process to use to fund another property purchase. I’ll check out the lease option though.
Cheers
Just found a damming report speading fear on wrapping in South Australia.
http://www.premier.sa.gov.au/MediaSearch.asp?Action=Search&choice=News&id=1092
I guess the minister does have a point.You can get an upfront payment with a lease option as well. You call it the option fee!
Robert Bou-Hamdan
Mortgage Adviser
http://www.mortgagepackaging.com.auFREE Finance-Related Newsletter – Click Here
Comments made are of a general nature and should not be construed as individual advice.
© 2004 Mortgage Packaging Pty LtdI guess the person who wrote the article has no idea what they’re talking about. Lease options are not illegal in SA. Perhaps the author should have worked out that wraps and lease options are two entirely different types of contract.
Keep smiling
FelicitySA is the state for pensioners and students.
Also the most public holidays than other state.
Wrapping is no go here, but lease option is definitely ok.
Byronent
Adelaide SAApparently you have to be careful in SA on how you structure your LOs, otherwise they too could be illegal. ie if they look too much like a wrap, with a decreasing strike price looking like a PI loan etc. So please talk to a good lawyer.
Terryw
Discover Home Loans
Mortgage Broker
North Sydney
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I am interested… in SA, if the purchase does not bring an action against the vendor, how can the vendor get in trouble?
Is this not a civil matter or do they treat it as legislative breach?
Robert Bou-Hamdan
Mortgage Adviser
http://www.mortgagepackaging.com.auFREE Finance-Related Newsletter – Click Here
Comments made are of a general nature and should not be construed as individual advice.
© 2004 Mortgage Packaging Pty LtdI think there is actual legislation against installment contracts.
Terryw
Discover Home Loans
Mortgage Broker
North Sydney
Click below to email meTerryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
As per the link http://www.premier.sa.gov.au/MediaSearch.asp?Action=Search&choice=News&id=1092
quotes:”involves selling a property on a rent-to-buy contract and is illegal in South Australia” – this suggests the contract is a single contract which would be illegal as far as I know. So just have one contract for the rental and one for the interest in the future purchase.Quote: ““The purchaser has no security or equity in the property until settlement. Any breach of contract, such as missing a payment, could see the purchaser completely lose his or her investment. This is a high risk scheme for the purchasers.” – You have no security or equity if you rent any way. Don’t have a missing payment claus
Quote: “‘Wrapping’ involves the sale of a property by instalments over a long period, with the sale price most often set up to 20% higher than the market value of the property. Payments are made weekly and referred to as ‘rent’, however these payments are usually higher than normal market rent for the property as well.” – Don’t do any option payments , just rent it a little higher than normal rent-if you have too. Sign the option to purchase cheaper.
Yes you will loose the option fee if you stuff up, so rent it, do it up, buy it and sell it.
e.g. 2 year rental, with the option to purchase.Keep it slow and simple
If the house is not worth more than the price you set when you need to buy – don’t buy it!
All the best
Allen [email protected]
P.S. this is a simple rent and buy option – the goal is to secure the house you may want to keep or profit from.At the local Fish and Chip shop (wrap) he he, in a rising interest rate market i would not be wrapping, the worst effected are low income earners and that is the target market of the wrappers.
Phil
)
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