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lease options resi properties case studies QLD

Discussion in 'Legal Issues' started by Elives, 10th Oct, 2015.

  1. Elives

    Elives Well-Known Member

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    Hi all,

    I've been interested in researching lease options on resi properties. and wanted to see what the court outcomes from these type of defaulting tenants were handled. i tried to find some case studies on

    http://www.sclqld.org.au/caselaw/search/index.php?keywords=call+option&court=QCAT&offset=1

    searching all courts (they have option to automatically search all courts) but i only found 1 for resi property and even that wasn't a lease option that was a instalment contract.

    i'm sure that QCAT must have seen heaps of these cases ever since rick otton and others starting teaching this strategy.

    1. I was wondering if i was looking in the wrong spot?
    2. is there an easier way to find these case studies?

    Cheers, Elives
     
  2. SonOfTrigger

    SonOfTrigger Well-Known Member

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    Do you mean wraps/vendor finance on instalment contracts?
     
  3. Elives

    Elives Well-Known Member

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    its vendor finance, its lease option.
     
    Last edited: 10th Oct, 2015
  4. SonOfTrigger

    SonOfTrigger Well-Known Member

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    I'm still not clear on the format sorry - where does vendor finance come into a standard put and call?(option to buy/option to sell)

    Rick Otton was wraps from memory - vendor financing someone via an instalment contract where ownership only transfers on final payment.
     
  5. SonOfTrigger

    SonOfTrigger Well-Known Member

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    I remember it being niche popular 10 years ago but wasn't it made difficult by changes to consumer finance law? You need to be registered as a financial institution to provide credit was the change i think. There was also significant bad press around back then when they went wrong. Not sure if there were many legal cases tried though
     
  6. Elives

    Elives Well-Known Member

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    lease option/put n call option is normally advertised as "rent to own" you might know it by.

    you need a credit license to do instalment contracts.
     
  7. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    I think you are confusing lease options with put/call options. They are totally different strategies.

    Previously the use of a put and a call option at the same time was used as a strategy to lock both parties into a purchase/sale yet allow the option to be assigned so a different people settled to the one who entered the option agreement. This allowed for minimal stamp duty. But doesn't work now in NSW.

    A lease option is where the owner of a property sells an option to purchase the property to someone else in conjunction to a lease on the property. Part of the rent may or may not come off the price the tenant can buy the option for.
     
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  8. Elives

    Elives Well-Known Member

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    i got the put % call option terminology from looking at the court case studies and dominique grubisa. i'm now guessing the court case studies were referring to what you've explained above and that dominique well i'm assuming she's talking about a lease option.

    but yes you are correct i was confused about the 2.
     
  9. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Here are some option cases from my notes


    Fiuggi Holdings Pty Ltd v Lamrocks Legal Pty Ltd t/as Lamrocks
    Solicitors and Attorneys; Actively Zoned Pty Ltd v Lamrocks Legal Pty Ltd t/as
    Lamrocks Solicitors and Attorneys [2012] NSWSC 1388

    Equity - fiduciary obligations of solicitors - put
    and call options entered into by law firm and client in relation to real
    property to be developed by client - whether:
    law firm breached fiduciary duty to client by failing to advise that client
    should obtain independent legal advice and by drafting documentation wholly
    favourable to law firm and related without advising client that options were of
    little or no value to client - measure of damages - loss of rent - loss as a
    result of forced sale - costs of audit and report - loss of capital gain -
    interest and associated bank costs - discount for contingencies or vicissitudes
    in relation to global financial crisis: Burger
    King Corp v Hungry Jack's Pty Ltd (2001) NSWCA 187.

    http://www.caselaw.nsw.gov.au/action/PJUDG?s=1000,jgmtid=161845

    =

    Hare v Nicoll (1966) 2 QB 130 at 141 option for purchase of property must be exercised strictly in accordance with its terms

    =
    C&P Syndicate Pty Ltd v Reddy [2013] NSWSC
    643

    Conveyancing – equity – construction and operation of commercial
    conveyancing documents – whether plaintiff landowner, acting through second
    defendant solicitor, validly exercised put option requiring first defendant
    prospective purchaser to acquire land - plaintiff sued purchaser for damages
    for breach of contract, and sought, if necessary, an order for specific
    performance in aid of damages claim - alternatively, if option not validly
    exercised, plaintiff sued solicitor for damages for professional negligence –
    held: put option validly exercised – plaintiff established case against purchaser
    – claim against solicitor dismissed – plaintiff entitled to award of common law
    damages - order for specific performance not necessary or appropriate.

    http://www.caselaw.nsw.gov.au/action/PJUDG?jgmtid=164977

    ==
    Acton Investments (ACT) Pty
    Ltd and Momac 2 Pty Ltd v Batticcotto [2014]
    ACTSC 31

    Contract
    for sale of land - defendants entered put and call option deed (deed) with plaintiffs
    who were registered proprietor of land and developer of apartments on land - plaintiffs
    delivered updated contract for sale of apartment in purported compliance with deed
    - contract provided for completion of sale within 10 days of receipt of
    notification by developers’ lawyers to defendants of satisfaction of all conditions
    precedent to completion in contract – date of completion set by agreement but defendants
    failed to complete – plaintiffs served default notice - defendants served
    notice of rescission - plaintiffs sued for unpaid deposit instalment and
    interest - defendants claimed plaintiffs had failed to provide a contract that
    complied with s11(1)(i) Civil Law (Sale
    of Residential Property) Act 2003 (ACT) as required by deed - whether ss9,
    10 & 11 of the Act required that seller attach to sale contract a current
    copy of certificate of title for contract to be enforceable, if it was otherwise
    available for inspection - required
    documents – attach - forms part of - held: incorporation of
    required documents was condition of contract - by failing to attach current
    edition of certificate plaintiffs had breached condition and defendants were
    entitled to rescind - judgment for defendants.

    http://www.courts.act.gov.au/supreme/judgment/view/7909/title/acton-investments-act-pty-

    ==

    Palermo Seafoods Pty Ltd v Lunapas Pty Ltd The NSW Supreme Court considered a range of issues in this case,
    including whether there was an option to renew the lease, whether the
    option to renew was exercised, whether the landlord was estopped from
    denying exercise of the option, and repair and re-entry.
     
  10. Elives

    Elives Well-Known Member

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    Thanks terry for the links, I was looking more for lease options for resi property for qld.

    i found a few for cpi's. i would have thought there'd be heaps but i couldn't find any. tomorrow i'll have a look at NSW and see if i can find any!
     
  11. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    try searching for 'rent to buy'
     
  12. consumerrights

    consumerrights New Member

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    This link might help - not sure any from Qld but includes an unreported lease option case from CCCT in NSW
    http://thenaysayer.net/rent-to-buy-links/
     
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  13. Elives

    Elives Well-Known Member

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    Thank you heaps! have been trying to find these types of cases for a week now. much appreciated!