1. Living on the Fringe Rent-to-buy and vendor finance
Susan Quinn, Senior Policy Officer
28 March 2017

2. Have you seen this?

3. Learning outcomes Know the risks of ‘rent-to-buy’ schemes
Identify if a client is in a rent-to-buy scheme
Know what happens after you refer a client to a lawyer
Provide effective assistance to a client
Know how to make complaints and advocate

4. What is rent-to-buy? ‘Buy without a bank’
Targets hopeful homeowners and desperate homeowners
Metro and regional areas
Varied contracts and deals
Vendor finance/vendor terms
Rent-to-buy/lease-options
*Unusual* off-the-plan deals
rent-buy-housing-black-market-report/

5. What is ‘rent-to-buy’? (cont’d)
Big risks and uncertainties
A small industry on the fringes
On the regulators’ radars

6. Typical transaction Broker signs ‘joint venture’ with homeowner
Broker signs up a buyer
Buyer pays deposit, moves in & makes payments…

7. Client experiences
Client video

8. What are the risks?

9. What are the risks? (cont’d)
Home buyers
No legal ownership
Uncertain legal rights
Money at risk
Home at risk
Unaffordable
Unknown costs
Default fees and charges
Can’t get finance
Home owners
Loses legal control
No fast sale
Less profitable than expected
Responsible for the broker’s conduct

10. Is your client in a rent-to-buy scheme?
I’m renting for three years then I can buy it
I couldn’t get a mortgage but my friend told me…
I’m buying directly from the owner
I saw it on Gumtree

11. Activity 1: Issue spotting
Your client shows you this document (groups 1, 2 and 3)
What can you glean from the document?
What would you ask your client?
What are your concerns for your client?
What else do you need (documents, info, assistance)?

12. What will a lawyer do? Assess legal position and prospects
Property title search
Property market value
Financial records
Due diligence (companies and individuals)
Seek specialist advice/assistance
Provide legal assistance
Advise the client
Negotiate for the client
Litigate?
Make complaints

13. The bigger picture: Complaints

14. The bigger picture: Advocacy

15. The bigger picture: Change in Victoria?
Consumer Affairs Victoria’s current Consumer Property Law Review
COMING SOON: Options paper
No more rent-to-buy?
Client stories count
See education/legislation/public-consultations-and- reviews/consumer-property-law-review

16. Checklist Manage housing security Get details
Documentation
Proof of payments
Correspondence
Pre-sale representations
Manage client expectations
Refer client to a lawyer
Consider alerting regulators

17. Activity 2: Assisting a client
Case study 1 or 2
How would you effectively assist your client?

18. Recap of learning outcomes
Lots of big risks
Listen/look for key things
Use the assistance checklist
Lawyer up
Complain

19. Call us! Consumer Action Law Centre Level 6, 179 Queen Street
Melbourne VIC 3000
Worker Advice Line: (03)
Rural access:
Mon – Fri 10am to 1pm and 2pm to 5pm