Has anyone heard of lease purchase on property? Below is an illustration of how it works.
When vendor sells the property, title is transferred to the buyer. Instead of obtaining financing from an financial institution, buyer gets financing from vendor, who charges a predetermined interest. If buyer defaults on repayment, vendor has the right to apply for foreclosure like a bank.Is lease purchase practised in Australia, particularly Melbourne? Is this legal?
ashrick
This would only work if the seller had clear title to the property, ie no loan, owning it outright. Otherwise the vendor could not transfer title without paying out their existing loan.
So I would think this situation would be rare, but possible.
Another way to do it, would be to get a loan, and then lease the property to a tenant and sell them an option to purchase as well. The title would stay in the seller’s name. This is legal, and I have done 3 of these in Victoria myself.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | 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
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