Just wanting to get some advice on some of the clauses that are a must to go into a wrap. We are wanting to make sure that if the vendor defaults on their loan payment that the purchaser is not effected by this. Also, what is a standard deposit requested for? And what about a buy out clause, if the purchaser refinances a few years into the wrap.
Thanks for your help.
Kate
[biggrin]The Contract should be UCCC compliant and therefore you should get specialist advice from a wrap savy lawyer.
The first point you raise depends on you. If you purchaser defaults it is upto you whether you take any further action in this respect.
There is no such thing as a standard deposit. In most cases they have little or no deposit to put into the deal.
Finally there is nothing to prevent the purchaser refinancing the deal at any time. Certainly you are entitled to insert a clause making a early payment penalty but cannot stop the client repaying your debt.
In fact under the Property Act if they have repaid 1/3 of the original principal they can ask you to transfer title into their name and you take a motgage against the property.
Richard Taylor
Residential & Commercial Finance Broker
Ph: 07 3720 1888
[email protected]Richard Taylor | Australia's leading private lender
Hi Richard,
“In fact under the Property Act if they have repaid 1/3 of the original principal they can ask you to transfer title into their name and you take a motgage against the property”
So my name would appear on the title document ?
I didn’t think this was possible, if this is the case then who not do it from square one when wrapping and avoid all the complications of the title ramaining in my name ?Ahh… of couse my financier would not allow transfer of the title…
Henry
Your name always appears on the Title document as the registered owner however the provision in the Property Act allows your purchaser to request you transfer the property into his name once he has repaid 1/3 of the original loan amount.
You of course can refuse this or make the terms not acceptable to encourage to refinace elsewhere. At the time of repaying your loan the Title would register into his name.
Richard Taylor
Residential & Commercial Finance Broker
Ph: 07 3720 1888
[email protected]Richard Taylor | Australia's leading private lender
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