Hi All
If you have any interest at all in real estate vendor finance, I'd suggest you read Tony Cordato's, "A Vendor Financier’s Guide to the new National Credit Act".
It can be found on the Vendor Finance Association's website at:
http://www.vendorfinance.asn.au/UCCC.pdf
Cheers, PaulPaul Dobson | Vendor Finance Institute
http://www.vendorfinanceinstitute.com.au
Email Me | Phone MeAn alternative way to finance your home.
Thanks Paul
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Hey Paul,
Thanks for telling us about this. I am looking at doing some vendor finance deals this year and next year so this is important to me. I have a question.
The National Credit Act applys when giving credit to a consumer, but the PDF mentions that if you engage in the debt as a company or a company acting as a trustee for the trust then they do not have to comply with the NCA. I purchase my properties through trusts, does this mean I don’t have to worry about the act?
Ryan McLean | On Property
http://onproperty.com.au
Email MeI think you will still have to worry about the act, and must be registered, if you are offering finance to consumers – ie personal buyers. If you are just buying you don't need to register.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Hi Ryan
As Terry says, anybody supplying credit to an individual (natual person) has to abide by the new NCC, after 1 July 2010.
There is an interesting area of the of the Regulatory Guides where you will see that the registration requirement applies to those who "carry on the business of providing credit". As stated in the Regulatory Guides, a one-off credit provider does not need to be licensed, nor do they need to register.
It will be interesting to see what number of transactions will be construed as "carrying on the business of …..". From one source I've heard the number 5 mentioned and from another 3. It will be interesting to see how it pans out.
Cheers, Paul
Paul Dobson | Vendor Finance Institute
http://www.vendorfinanceinstitute.com.au
Email Me | Phone MeAn alternative way to finance your home.
So Paul,
When you mentioned “carry on the business of providing credit”:
Does this mean that if I approach a vendor who has NEVER done a vendor finance deal before and they agree to carry back 20% of the finance to me as a person (not a trust/company) then they don’t have to apply for a license? Just people that do it regularly?Ryan McLean | On Property
http://onproperty.com.au
Email MeHi Ryan
That sounds about right to me, with the proviso that they also don't enter the "business" in the future. It's early days with this new legisaltion so I'd definitely run all this past a solicitor familiar with the new legislation.
Cheers, Paul
Paul Dobson | Vendor Finance Institute
http://www.vendorfinanceinstitute.com.au
Email Me | Phone MeAn alternative way to finance your home.
lol
Good luck finding a lawyer familiar with the new legislation at this point! After Tonly talking to us for 2 hours a couple of months ago, I'm not sure who was more confused at the end of it all!
In any case, I'll certainly be registering sooner rather than later, even though it may be a while before I would be technically required to.
Aside from the added credibility that ASIC registration will give us, I also believe that at the beginning registration will be a much easier process than it will be a few years down the track. I could be wrong, but that's what I'm betting on.
Andrew
I agree.
i registered on the 3rd Apil and got my letter less than a week later.
i think as the months go by and into May / June you might find ASIC are rather busy.
Richard Taylor | Australia's leading private lender
Hi All
We too found the registration process quite straightforward.
I also agree with Andrew's comment that the licence may be more difficult to get in the future, e.g. there is already a requirement that after 30 June 2014, all ACL representatives will have to have a minimum of a Cert 4 in Finance.
So, if your company is the licence holder and you're a representative ………..
Cheers, Paul
Paul Dobson | Vendor Finance Institute
http://www.vendorfinanceinstitute.com.au
Email Me | Phone MeAn alternative way to finance your home.
You must be logged in to reply to this topic. If you don't have an account, you can register here.
