Lease option - Residential

Has anyone purchased Residential using the Lease option process.

If so what do I need to look out for? (good and bad)
Does anyone have a Lease option contract they would share, so as I could review to help better understand the process?

Any tips on legal lawyers/solicitors who would be worth talking to in regards to setting one up.

 

Save your deposit and buy in the traditional way - LO are very risky, you pay an unrealistic price as you don't have a deposit, you won't have title transferred to you until you refinance, no caveat, steer clear.

Often sounds too good to be true.

 

As they buyer putting the idea to the vendor. At a price you would be prepared to pay normally would that change your view on the potential price being unrealistic.
could the title issue be covered in the terms of the contract?

One issue I see is if the vendor has an outstanding loan how do I ensure they continue to pay the loan and not draw back from it? is it even a issue for me as the buyer?

 

You will need the vendor's bank approval to lodge a caveat. Bank's don't like to reduce their security. You can't guarantee that they will pay their mortgage nor that they won't draw down further.

 

And they already have financial pressures. This is yet another idea spurned by spruikers selling unicorn feather strategies combined with predatory purchasing ideas.
There is one I recommend not to approach : Legal Tip 319: What is a ‘Vestey’ Trust?

Lease options are more a US concept. A lease option in NSW involves a tenant having a right to exercise a option to extend the lease term or to buy the property. Common to commercial, not residential. The landlord is giving excessive rights to the tenant.

 

long before I was a lawyer I sold 3 properties on a lease option scheme.
The buyer ended up making way more money than me. for solicitors look at Lewis O'Brien in VIC, Bob Balanda in QLD and Tony Cordato in NSW.

 

No State requires the mortgagee to consent to the registration of a Caveat.

NSW does if you intend to formally register a mortgage. In VIC RTB or LO are outlawed under 750K and in metro.

Qld the Caveat is only valid for 90 days so is useless to protect the buyer.