All Topics / Hotch Potch / Lease Options to retain Rent Assistance

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  • Profile photo of WallFlowerWallFlower
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    @wallflower
    Join Date: 2004
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    Can one sell a lease option to one who wants to continue receiving rental assistance ?[strum]

    WF

    Profile photo of AdministratorAdministrator
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    @piadmin
    Join Date: 2013
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    On the surface I cannot see why not.

    However, this brings up another question i.e.
    on exchange of contract (not an option) with a delayed settlement can one have the $ 7.000 government grant released on exchange of contracts ?

    If so , in which states ?

    Pisces

    Profile photo of WallFlowerWallFlower
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    @wallflower
    Join Date: 2004
    Post Count: 205

    Do you think this is fudging the system ?
    Also the exchanging of ‘contracts’ and consequently claiming the FHOG might alert the powers that be that there was a whole lot more goin’ orn than just renting….

    WF

    Profile photo of AdministratorAdministrator
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    @piadmin
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    >>Do you think this is fudging the system ?<<

    In what way Wallflower ?

    Pisces

    Profile photo of FFCommFFComm
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    @ffcomm
    Join Date: 2004
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    From what I know about LO is that you cannot claim FHOG, because if you try to claim FHOG you are selling the property, and because you are selling your client cannot get Rent Assistance, while with LO’s you are not selling, rather leasing so you can claim Rent Assis. but not FHOG.

    Rgds.
    Lucifer_au

    Profile photo of WallFlowerWallFlower
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    @wallflower
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    Pisces, when paying $150.00 pw rent,(in say a suburb of Melbourne) your basically in a fairly ordinary house.You are then paid rent assistance (if you qualify) on a percentage of that figure. With the LO, for the same ordinary house you’ll be paying possibly $200.00, so your rental assisance will be higher , but instead of pissing your money away , you’re trickling it into somebody’s pocket at the governments expense to ultimately own you house anyway…
    I can’t decide…

    Profile photo of AdministratorAdministrator
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    @piadmin
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    Wallflower, you are paying say $ 200 per week
    instead of say $ 150-00.

    The difference is partly paying a higher interest rate and partly a bit of repaying the principle.

    If I were you I would be more concerned about myself. Is it worth it, what difference does it make to YOU if you stay put or if you make an arrangement to eventually own your own home.

    It may be a bit hard to see as the debt is a lot of money and therefore takes a considerable time (20-30 years ?) to repay.

    All I know is that if the rent continues to increase over the years you would soon be paying $ 200 per week anyway in rent.

    It doesn’t put any money into my pocket whichever way you jump but it is certainly worthwhile to give it some serious consideration.

    Pisces

    Profile photo of WallFlowerWallFlower
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    @wallflower
    Join Date: 2004
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    Hi Pisces,

    ‘Can one sell a lease option to one who wants to continue receiving rental assistance’

    It was just a thought, as i was tilling the bathroon and wishing i was dead…
    Thanks for the input
    WF

    Profile photo of AdministratorAdministrator
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    @piadmin
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    A lease option is just that, a right to buy. It isn’t a contract to purchase until you exercise the option by telling the person who issued the option ‘I now want to purchase the property on the conditions described in the option.’

    At that point you have created a binding contract.

    I guess you can see it as if you are saving money whilst you are renting. That part of the rent which is more than the normal rent represents your saving which will be put towards the purchase – if and when you decide to turn the option into a contract.

    In the meantime you are obligated to continue leasing the property and in the event you break that lease you will lose your savings (unless there is a condition in the agreement to the contrary).

    Pisces

    Profile photo of TheBTheB
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    @theb
    Join Date: 2002
    Post Count: 135

    Hi All

    you can do a lease option to a client and they can claim rent asistance for themsleves by taking their lease to the appropriate govt department.

    However, this may open you (and your client) up to attack by the authorities if they make a decision that the rental assistance monies were to be only for rent and not to assist in purchase.

    One argument that could be run is if your lease option is seen to be in reality a pseudo contract of sale rather than a lease. Thus, No lease = No rent assistance.

    Best to consult with the solicitor on your team to canvas all of the issues relevant to the documents that you are using.

    cya

    the B[:)]

    __________________
    “Life is a Dance”

    Profile photo of AdministratorAdministrator
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    @piadmin
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    >>However, this may open you (and your client) up to attack by the authorities if they make a decision that the rental assistance monies were to be only for rent and not to assist in purchase. <<

    I see it in the light of someone saving towards an eventual purchase.

    Even the government eventually wins as that person eventually will get off the treadmill of getting rent assistance.

    If one compares what someone who is saving part of his money via a lease option does to what someone else does who spends ‘all his money’ instead of setting something aside towards an eventual purchase.

    BTW, I use the term ‘all his money’ cautiously because the person on Social Security doesn’t receive a whole lot of money. It is a bare existence.

    Pisces

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024

    An easy way around this is to use an License To Occupy rather than a Lease Option.

    Be creative in your Vendor Financing and work with the legislation.

    We have started trialing a shared ownership scheme in Qld which appears to working well and suits many clients who are receipt of Rent Assistance.[cowboy2]

    Cheers Richard
    richard at fhog.com.au
    http://www.fhog.com.au

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    Just a solution waiting to be found

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