A complicated credit arrangement
Home buy-back schemes are schemes where you sell your family home to someone else (the transferee). The transferee pays your debts or gives you money, and you have the right to occupy the home in return for rent.
You may be introduced to a buy-back scheme through a third party or broker called a ‘buy-back operator’ or a ‘buy-back promoter’.
You can repurchase the house at some future time at a specified price, but there is often a large fee included.
Lastly, your main purpose for arranging this finance must be primarily for personal, domestic, household or investment purposes.
A home buy-back scheme is not a loan – it is a complicated credit arrangement. Check to see what documents you are being asked to sign. In particular, look out for any document headed ‘Agreement for Sale and Purchase’ and any documents that contain the words ‘option to purchase’ or ‘licence to occupy’ for your home.
Often the buy-back operator will arrange legal advice and get you to sign that the advice was independent. Legal advice from a lawyer arranged by the buy-back operator may not be as full and frank as advice from a completely independent lawyer.