The promoters of a rent-to-buy plan in Western Australia have been misleading “vulnerable people” and conducting business without a licence, Commissioner for Consumer Protection Anne Driscoll has claimed.
Ms Driscoll named No Loan Homes Pty Ltd, and its sole director Filip (Fil) Butkovic and employee Nikola (Nik) Butkovic, of Nedlands, WA, as the culprits.
“While the department begins legal action in the Supreme Court to force No Loan Homes Pty Ltd to discontinue its current business activities, I believe it is imperative for potential buyers and sellers to be aware of our concerns about the scheme being promoted by the Butkovic brothers.
“We believe the type of transactions carried out by No Loan Homes requires a real estate licence and practice certificate.”
The Consumer Protection department said No Loan Homes Pty Ltd, the proprietor of the business Perth’s Easyhomes WA, operated a website www.easyhomeswa.com which lists WA properties available for sale under a Rent-to-Buy arrangement.
“An investigation has discovered that at least four of the properties on the site are actually not for sale and, in some cases, owners had rejected approaches to consider rent-to-buy options,” the department said.
According to the department, the scheme promoted by No Loan Homes sees the buyer pay an upfront ‘option fee’ to the business of about $15,000, as well as an ongoing fee, a proportion of which is to be credited towards the final purchase of the property. The buyer is required to sign a tenancy agreement with the seller in which rent is payable until the end of the contract period, usually four years, when the option to purchase is to be exercised.
“We believe some parts of this tenancy agreement are illegal and therefore the agreement does not provide proper protection to either party,” Ms Driscoll said.
“Buyers who default on their tenancy agreement or can’t get finance to buy the property at the end of the option period are at risk of losing the money that was intended to go towards the purchase.
“Money paid by the buyer does not appear to go into a trust account and there is very little accountability of where the funds go or any system in place to keep track of the ongoing option payments.”