Vendor finance in SA?

[alexpk]

Hi

I have noticed quite a number of people who request for vendor financing in SA?

Anyone know how this is done?

I have heard that there are contracts executed, just that there is no reference to vendor financing/wraps - not sure what it is called. But the effect is the same.

Anybody seen this occur in SA?

thanks all

Alex

 

[duncan_m]

Hi

I have noticed quite a number of people who request for vendor financing in SA?

Anyone know how this is done?

I have heard that there are contracts executed, just that there is no reference to vendor financing/wraps - not sure what it is called. But the effect is the same.

Anybody seen this occur in SA?

thanks all

Alex

I dont know of anyone doing anything buy "Lease Options".. ie, the property is rented, and the "Tenant" has an option to buy the property at some later date.. usually a portion of the rent is credited to the final purchase price.. and an "option fee" is collected up front.

 

[michaelg]

Hi,

For your information, in South Australia (and only in South Australia) the sale of land or business via instalment terms contracts is not permitted.

Here's the section of the law that may interest you...
http://www.austlii.edu.au/au/legis/sa/consol_act/labaca1994333/s6.html

This does not affect lease options, however caution must be observed to ensure that the lease/option is not drafted to operate just like an instalment contract (specifically rent credits etc).

Regards
Michael G

 

[Xenia]

Yes I agree, installment contracts are not permitted and neither are option to purchase contracts that allow payments by installments.

In a recent case a few weeks ago (I think) a lease option was seen as an installment contract and therefore breached section 6 of the land and business (sale and conveyancing act)

http://www.austlii.edu.au/au/legis/sa/consol_act/labaca1994333/s6.html

The judge said "I don't care what you call it, you can call it Kangaroo! It is still an installment contract"

There are a few people that can do vendor financing successfully in SA but you have to know the laws.

Registered second mortgages on a title of the property is another form of vendor financing that is permissable in SA

Hope this helps.

 

[redwing]

I would've thought with Lo-Docs, No-Docs etc a lot of this type of lending would've been made redundant?

And those few people that cant get lo/no-docs would you realllyy want to do business with them..and get involved in a legal web??

Redwing

 

[duncan_m]

Registered second mortgages on a title of the property is another form of vendor financing that is permissable in SA

Xenia.. are you able to expand on this?

 

[kathryn d]

Can't help with Vendor finance in SA.

However, we did use it to purchase our first IP. The vendor agreed to finance part of the downpayment.We agreed on term and interest rate. The lawyers wrote up a paper. The vendors requested collateral and we offered a second mortgage on the property. Every month we write the vendors a cheque.No penalty for paying it off early either.
It is basically a form they printed off the internet and comes with a payment schedule.