Hi All
Registration for the Australian Credit Licence will open on 1 April 2010. If you are involved in real estate vendor finance, I suggest you have a thorough read of a couple of ASIC sites. This is because ASIC will soon be taking responsibility for consumer credit nationwide. At that point State based Credit Provider licences will become obsolete and the Australian Credit Licence will come into being, also nationwide. The sites are:
http://www.asic.gov.au/asic/asic.nsf/byheadline/Credit+licensing?openDocument
Cheers, Paul
Paul Dobson | Vendor Finance Institute
http://www.vendorfinanceinstitute.com.au
Email Me | Phone MeAn alternative way to finance your home.
Great thanks Paul.
Really appreciate you posting this.
I can't seem to find any costs involved. Do you know what they will be? I only have one wrap, so I certainly hope there won't be a high cost for the ASIC licensing.
Cheers,
MattHi Matt
So far, I too haven't been able to discover what the cost of the licence will be.
In relation to your one existing Instalment Contract, if you plan to not do anymore, you may be covered by Regulatory Guide 203.31 and not require a licence. However it's early days and I certainly advise you look for assistance from the Vendor Finance Association of Australia and a real estate vendor finance specialist lawyer.
Cheers, Paul
Paul Dobson | Vendor Finance Institute
http://www.vendorfinanceinstitute.com.au
Email Me | Phone MeAn alternative way to finance your home.
As a side note, it is also expected that the business and investment purpose declaration is gonig to change in the near future in order to bring most consumer lending under control – business and commercial lending is slotted to be reviewed thereafter.
ahh i see.. great thanks for the post, very much appreciated..
Is this for people selling their properties with vendor finance? Or for people trying to buy property with a vendor finance agreement?
Ryan McLean
http://CashFlowInvestor.com.au
Positive Cash Flow Properties Are Just a Click AwayRyan McLean | On Property
http://onproperty.com.au
Email MeFor people selling and offer VF.
Richard Taylor | Australia's leading private lender
So do you have to have a credit license to offer vendor finance to a buyer?
Ryan McLean | On Property
http://onproperty.com.au
Email MeHi Ryan
The National Consumer Credit Protection Act will come into effect on 1 July. It looks like the only vendor finance technique that won't be covered by the new Act will be Lease/Options. For the rest, you'll need a licence for all new transactions, after 1 July. Also, there are provisions in the new Act for licence holders to appoint representatives.
Cheers, Paul
Paul Dobson | Vendor Finance Institute
http://www.vendorfinanceinstitute.com.au
Email Me | Phone MeAn alternative way to finance your home.
I have come across a group that will accredit groups in credit Representatives for $700 per year.
If interested personal message meHi Kane
Sounds interesting. Do you know if it includes both ACL authorisations, i.e.
1. "Engage in credit activities other than as a credit provider", and
2. "Engage in credit activities as a credit provider"?Most Mortgage Brokers only need the first authorisation, so if the underlying ACL only has this authorisation, Mortgage Brokers will be fine. Provided, of course that the Licensee provides adequate monitoring and supervision of it's Credit Representatives.
However Vendor Finance businesses need both authorisations, if they are going to sell their own properties with a vendor finance based loan. If Vendor Financiers are considering becoming a Credit Representative I'd suggest they check their Licensee has both the authorisations.
It's quite possible the ACL licence holder mentioned by Kane has both authorisations. This is just a suggestion that everybody considering becoming a Credit Representative do their due diligence.
Cheers, Paul
Paul Dobson | Vendor Finance Institute
http://www.vendorfinanceinstitute.com.au
Email Me | Phone MeAn alternative way to finance your home.
Hi all;
I've just joined; And liking the forum.
I'm in the middle of researching options for investing now instead of the waiting for the equity path…. But have just found that this type of investing requires licences to provide financing when on selling property.
Is the licence a government requirement or industry requirement……
And how many companies are training for it…….. Any of them in Perth W.A……..
GH
Hi Glen
In relation to "researching options for investing", I'll assume your reference to "options" is a reference to using options for vendor finance. If it's more along the lines of using options to control a property, while you get a DA, then the following isn't really what you need.
Here's an overview of how the National Consumer Credit Protect Act regulates some vendor finance:
As one of Australia’s most experienced Vendor Finance lawyers wrote recently, “anyone serious about vendor finance cannot be a one trick pony – that is, do lease options only.“
The new National Consumer Credit Protection Act requires anybody or any company who “in the course of a business” provides consumer credit or consumer credit advice, to hold an Australian Credit Licence (ACL) or to be a Credit Representative (CR) of an ACL holder.
- You do not need ACL coverage if you only plan to use Lease/Options only..
- If you plan to use Instalment Contracts and/or vendor financed Mortgages in your vendor finance (VF) business, you need to be an ACL holder or a CR.
- All Vendor Financiers who intend to become VF Joint Venturers, or who desire to advertise on websites or in the media need to obtain an ACL or be authorised as a CR.
In an effort to get ACL coverage for as many Vendor Financiers as possible, the Vendor Finance Institute has released the ACL Application – Assistance Pack (ACL Pack) and our authorised Credit Representative Program.
I only know of one vendor finance educator that ran a 3 day course in Perth last year. I'm not sure what's planned for 2011.
Cheers, Paul
Paul Dobson | Vendor Finance Institute
http://www.vendorfinanceinstitute.com.au
Email Me | Phone MeAn alternative way to finance your home.
Cheers Paul;
The idea is to use options to buy & sell. I may have a property to purchase soon with the approach of using the option method; but I reckon the seller may need to get the above licence to help with the sale of the property….. Would this be a correct assumption????
many thanks for your time
GH
Hi Glen
In relation to your " Would this be a correct assumption????" I'd refer you to:
- You do not need ACL coverage if you only plan to use Lease/Options only.
from my post above.
As neither an real estate option nor a lease is regarded as a credit product, an ACL should not be needed. However please do not rely on this as I'm not a qualified solicitor and I suggest you check with your relevant professional.
Cheers, Paul
Paul Dobson | Vendor Finance Institute
http://www.vendorfinanceinstitute.com.au
Email Me | Phone MeAn alternative way to finance your home.
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