Below is a proposed amendment to section 6 of the Land and business (sale and Conveyancing act) 1994.
34—Amendment of section 6—Abolition of instalment purchase or rental purchase arrangements
(1) Section 6—after subsection (2) insert:
(2a) A contract under which a person has—
(a) a right or obligation to purchase land; but
(b) an obligation to pay rent in respect of a period of occupation of the land of more than 6 months before the right is exercised or the purchase completed,
is voidable at any time at the option of that person.
(2b) A person will not be taken to have elected to affirm a contract that is voidable under subsection (2a) by reason of a payment made under the contract.
(2c) If a person avoids a contract that is voidable under subsection (2a), the person may, by action in any court of competent jurisdiction, recover any amount paid under the contract in excess of what would have been fair market rent for any period for which the person has occupied the land under the contract.
(2) Section 6(3)—after the definition of deposit insert:
rent includes any amounts payable in respect of a right to occupy land.
It is basically saying that anyone with an option to purchase a property in which they are paying rent for more than 6 months can ask for all their money back if they decide not to purchase. The contract is voidable!!! The vedor/owner however is locked into the contract if the purchaser does decide to buy!
I think this piece of legislation is appualing on the part of the state government and there is no need for the proposed changes. There is a serious issue with affordable housing in SA and they want to limit the solutions! Lease options create opportunities for home buyers to enter the market and this should be seen as being favouable!
The state governement is allowing equity loans in which a bank can finance a 20% deposit then be allowed to take 40% of any future equity in the home once it is sold! Why is this scam allowed and yet they want to abolish lease options in which a purchaser can keep all future growth in the propertry even before it is purchased!
During a discussion with parliment on March 6, the Real estate institute of SA neglegted to comment on this part of the legislation. Typical real estate agents.... focused on commissions and not solutions!
This affects all investors whether involved in vendor financing or not. Investors, renovators and developers can no longer negotiate a settlement of 6 months or longer for the purpose of renovating or developing the land under a lease agreement or license to occupy, the contract would be voidable!
We are obviously opposing these changes and I would like to hear from any one in SA who this is affecting!
34—Amendment of section 6—Abolition of instalment purchase or rental purchase arrangements
(1) Section 6—after subsection (2) insert:
(2a) A contract under which a person has—
(a) a right or obligation to purchase land; but
(b) an obligation to pay rent in respect of a period of occupation of the land of more than 6 months before the right is exercised or the purchase completed,
is voidable at any time at the option of that person.
(2b) A person will not be taken to have elected to affirm a contract that is voidable under subsection (2a) by reason of a payment made under the contract.
(2c) If a person avoids a contract that is voidable under subsection (2a), the person may, by action in any court of competent jurisdiction, recover any amount paid under the contract in excess of what would have been fair market rent for any period for which the person has occupied the land under the contract.
(2) Section 6(3)—after the definition of deposit insert:
rent includes any amounts payable in respect of a right to occupy land.
It is basically saying that anyone with an option to purchase a property in which they are paying rent for more than 6 months can ask for all their money back if they decide not to purchase. The contract is voidable!!! The vedor/owner however is locked into the contract if the purchaser does decide to buy!
I think this piece of legislation is appualing on the part of the state government and there is no need for the proposed changes. There is a serious issue with affordable housing in SA and they want to limit the solutions! Lease options create opportunities for home buyers to enter the market and this should be seen as being favouable!
The state governement is allowing equity loans in which a bank can finance a 20% deposit then be allowed to take 40% of any future equity in the home once it is sold! Why is this scam allowed and yet they want to abolish lease options in which a purchaser can keep all future growth in the propertry even before it is purchased!
During a discussion with parliment on March 6, the Real estate institute of SA neglegted to comment on this part of the legislation. Typical real estate agents.... focused on commissions and not solutions!
This affects all investors whether involved in vendor financing or not. Investors, renovators and developers can no longer negotiate a settlement of 6 months or longer for the purpose of renovating or developing the land under a lease agreement or license to occupy, the contract would be voidable!
We are obviously opposing these changes and I would like to hear from any one in SA who this is affecting!
