Rent to buy
A rent to buy scheme, also known as wrapping or a lease-option scheme, is the purchase of a property in instalments. You don't legally own the property until settlement which only happens once all of the instalments are paid.
It is strongly recommended that you avoid these schemes as they are a high risk for buyers and are usually aimed at people who are unable to get approval for finance from most lending institutions. If you are on a low or moderate income you may be eligible for a home loan from HomeStart Finance.
As with any contract, you should always read the terms and conditions, make sure you understand them and their possible implications fully, and seek independent, professional legal advice before signing.
Some rent to buy contracts stipulate that if you are late with one instalment the contract will be void and you will lose any money you have already paid.
Although these types of schemes are popular in other states and territories, any contract that requires the payment of part of the purchase price for a property, other than a deposit, isn't legally binding in South Australia. This means that if you have signed a rent to buy contract you may be able to take the matter to court to try and recover some or all of the payments you have already made.
If you have any concerns or questions about a rent to buy scheme in South Australia contact Consumer and Business Services.