Underbelly: housing schemes- Vendor finance and rent-to-buy housing schemes called a ‘black market’

Underbelly: housing schemes

 

Vendor finance and rent-to-buy housing schemes called a ‘black market’

 

 

The seemingly unstoppable rise in housing prices over the last decade has caused many Australians to feel ‘locked out’ of the dream of owning their own home.

 

Perhaps in response to this, a string of new businesses (called ‘equity providers’) have opened shop and now offer purchasers the ability to take a loan to pay the deposit on their home. The purchaser then makes their usual mortgage repayments to a bank in addition to paying back the equity provider for the deposit, usually over a period of 5 to 10 years. Assuming the purchaser has met their instalment payments, each year the equity provider transfers a small portion of ownership to the purchaser.

 

While this might appear to be great news for young people entering the property market, a recent investigation has revealed that people who enter into these arrangements are sometimes left worse off or even financially ruined.

 

The way the equity provider often charges what they call ‘option fees’. These fees are paid in exchange for the right to purchase the property from the equity provider at an agreed value when the instalments for the deposit are paid. The option fees don’t go towards paying off the debt.

 

The reason these arrangements can be risky is because the value of the property, and therefore the price the purchaser pays the equity provider at the end of the agreement, is agreed at the beginning of the agreement and not updated at any time before the purchaser purchases the property from the equity provider. Just some of the issues this creates for the purchaser include;

 

·        Some equity providers have over-inflated the worth of the property and set very high final purchase prices;

·        The purchaser ends up paying exorbitant option fees as well as funding two mortgages, and is  far worse off than before the agreement; and

·        Even if the purchaser is able to meet the repayments, there is then an over-inflated price for the property to be paid at the end of the agreement.

 

Some consumer advocates have called for these schemes to be banned, or at the very least provide protection under the National Credit Code.

Parental Communication Paramount Words by head of Family Law- Warren Tegg

Most separating parents want an ongoing and meaningful relationship with their children. They will, after all, be parents for life. But what is the key to parenting effectively, while living in separate houses? Parents will often each have different ideas regarding parenting, but that does not mean that one or the other parent is wrong, they are just different. And the differences are to be celebrated – those differences provide the children with two separate, and not necessarily opposing, viewpoints. In order for a shared parenting agreement to work, these two people have to find a way to work with their differences. Firstly, children are very intelligent, they know when a weakness or difference of opinion appears in the approach being taken by their parents. Anyone with children will know they will play these two parents against each other to gain an outcome they see as beneficial to themselves. This play off isn’t overtly selfish. Very young children will, early in the break-up, state to both parents that they don’t want to go to the other. This has nothing to do with choosing one parent over the other. This break-up is very unsettling for the child, so the child may seek the exact same loving and caring response from both their parents to make themselves feel safe. It is important for parents to recognise this and be able to maintain a basic and civil level of communication, just to protect themselves from being exploited. It is helpful for the children for them to focus, not on the differences, but basics that perhaps they substantially agree upon. This way they can support one another in parenting decisions – provided same are basic to the child’s welfare and do not create any risk to the children. The Court considers the parent’s ability to talk to one another about their children to be of paramount importance when looking at a co-parenting regime. It is deemed by the law to be in the children’s best interests that parents share the responsibility for the children’s care, but this becomes impossible if the two parents cannot cooperate together on some level. Being able to speak to one another civilly and make decisions about your children, even when you do not entirely agree with the other party, is of fundamental importance if it is your goal to be a share parent. Celebrate your different views, they introduce the children to diversity of thought! Agreeing on a set of basics you can live with, will lead to happier and more effective parenting.

Is an employee entitled to compensation for injuries sustained while working flexibly from home?

Employers in recent years are more inclined to grant employees flexible work arrangements including working from home. The result is that many employees are not restricted to traditional physical locations such as an office. Recent cases have shined a light on the laws surrounding these arrangements and the conflict with worker’s compensation for injuries.

For employers, the flexibility granted to employees comes with some degree of risk. The careful controls and Workplace Health and Safety procedures employers invest significant resources to implement around the office may not be suited to a home environment where the risks of injury are outside their control.

The important question is whether the injury arises out of or in connection with the course of employment. This includes injuries which are sustained;

1. While physically in the place of employment, or
2. While temporarily absent from the place of employment for an ordinary recess, for example a regular or scheduled break.

If an employee takes a “frolic”, for example by going for a run in the middle of the day, this is not an ordinary recess. Other examples of frolics include;

• Where an employee courier driver deviates from the route the employer planned for them,
• Where an employee goes somewhere the employer told them not to go, and
• Where an employee takes more breaks than the employer prescribes.

The take-home message (sorry, couldn’t resist!) is that simply because employees are granted flexible working arrangements, they are not necessary entitled to compensation for injuries that arise while working flexibly from home.

A lesson for employers is to ensure adequate controls are established for the employee’s home environment. We advise clients that this is best accomplished by giving the employee