Consumer Action is assisting a mother of six in a legal action against JPM Property Finance Solutions Pty Ltd trading as My Bayhay Now and Magnaye Investments Pty Ltd.
These businesses have been involved in vendor finance, ‘rent-to-buy’ and off-the-plan property sales in the Melbourne metropolitan area.
Victorian mother of six Zuhura Nimbona claims that these businesses promised to build her a brand new family home, but that she lost almost $60,000 and the house was never built.
Consumer Action Law Centre has now filed a County Court Writ on behalf of Ms Nimbona against JPM Property Finance Solutions Pty Ltd and Magnaye Investments Pty Ltd.
Ms Nimbona alleges that:
• she was told that they would sell her land and build her a house that she could move into within 9 months,
• relying on that, she signed a ‘letter of intent’ (essentially a contract of sale) and paid more than $57,000, and
• the house was never built and her money has not been refunded.
The dangers of rent-to-buy and vendor finance
Vendor finance or ‘rent-to-buy’ schemes promise to help you buy property when you can’t get a regular mortgage. They target people who cannot get into the property market because of their incomes, savings or credit history.
Consumer Action Law Centre is concerned that vulnerable Victorians are falling victim to high risk rent to buy home schemes.
“Under these arrangements you do not own the property until you have made all the payments, ” Lachlan Edwards, Solicitor at Consumer Action.
‘These arrangements are risky because you normally pay much more than the property is worth and you could lose your money if you have difficulty making payments,’ Edwards said.
Consumer Action has detailed these and other risks in our report Fringe dwellings: The vendor finance and rent-to-buy housing black market.
If you’ve faced a similar problem and are in Victoria, please contact our advice services by clicking here.