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Thinking of a 'rent to buy' home purchase?

You should get legal advice

There are things you need to know:

  • You may not legally own the property.
  • There are hidden fees and charges.
  • You may pay significantly more than the value of the property.
  • If you do not complete the arrangement you may not get your money back.

What are the issues with a 'rent to buy' arrangement ?

  • You may never legally own the property, depending on the 'rent to buy' arrangement.
  • You may not be entitled to sell the property, as you may be considered as just a tenant under the law.
  • The vendor may continue to own the property for many years, until the 'rent to buy'
    arrangement is completed.
  • The vendor is often different to the 'rent to buy' business. This makes it hard to resolve disputes.
  • You have less legal protections under a 'rent to buy' than a standard bank home loan.

What are the hidden fees and charges?

  • 'Rent to buy' arrangements often charge a higher interest rate than a standard bank home loan.
  • If you end the 'rent to buy' agreement, prior to completing, you may not get the money you have put into the property back.
  • Your weekly repayments may be more than normal market rent for the property. Sometimes your repayments may be more than a standard bank home loan.
  • You are responsible for paying the rates, insurance and repairs, even though you do not own the property.

For help call LawAccess NSW on 1300 888 529

or go to

http://www.legalaid.nsw.gov.au/contact-us to find a Legal Aid lawyer near you.

August 2016