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  • Profile photo of dashitdashit
    Member
    @dashit
    Join Date: 2007
    Post Count: 4

    Hi.  I'm wondering how potential wrappees cover themselves against the death, say, of the wrapper. If I was going to finance my home using wrap finance, I'd want to know that the person I'm borrowing from was going to be around to complete the deal. Presumably this means that the wrapper needs to set up some sort of ongoing business entity.

    Thanks,
    Dale

    Profile photo of Paul DobsonPaul Dobson
    Participant
    @pauldobson
    Join Date: 2003
    Post Count: 1,196

    Hi dashit

    Upon the death of a Wrapper who is an individual, the Instalment Sales Contract passes into the wrapper's estate.  The wrapper's beneficiaries will ultimately own the Wrapper's interest in the Contract.

    As the new owners, they retain only the rights given to the original owner, i.e. because the interests of the original Wrapper have passed to a new owner, nothing gives the new owner the right to change the terms of the original Contract.  Just out of interest, all Instalment Sales Contracts I've seen in NSW and Qld, allow the Wrapper to sell his/her interest in the Contract to another person.

    My observation is that most Vendor Financiers end up conducting their business in a Corporate or Truat structure,  As you mentioned this does make the passing of someone involved in the business less challenging.

    Cheers,  Paul

    Paul Dobson | Vendor Finance Institute
    http://www.vendorfinanceinstitute.com.au
    Email Me | Phone Me

    An alternative way to finance your home.

    Profile photo of dashitdashit
    Member
    @dashit
    Join Date: 2007
    Post Count: 4

    Thank you very  much Paul. That clears up a few things.

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