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  • The contract for the purchase of land was unjust because the plaintiffs, as purchasers, had no equity in the property and were at risk of losing payments made if the contract was terminated
  • “Rent to buy” agreements make home acquisition possible for people who could not otherwise afford it, but the terms must be carefully considered to ensure the purchaser’s investment in the transaction is properly protected

On 24 October 2003, J and D entered into a “rent to buy” contract with Twin Vision Properties Pty Ltd, the vendor (Andrews v Twin Properties Pty Ltd (In Liquidation)). The contract was for the purchase of a house in Cumnock, a small town between Orange and Dubbo. The purchase price was $61,499 of which $49,499 was borrowed by way of vendor finance.

The term of the contract was 30 years. During the term the purchasers were obliged to make weekly payments to the vendors, including amounts for rates and insurance. The contract provided that the purchasers were not entitled to a transfer of the property until they had paid the last instalment. If they failed to make an instalment payment, the vendor could serve a default notice and, if that was not complied with, the vendor became entitled to terminate the contract. Upon termination all money paid under the contract was forfeited to the vendor.

On 3 January 2010, the house was destroyed by fire. Up until then, the purchasers had occupied the property and had reduced the money owed under the contract to $37,517.

Twin Vision claimed on the insurance and in July 2010 received $155,668. In August 2010, Twin Vision told J and D that it held funds and intended to rebuild. J and D asked that the insurance money be applied to the balance owing under the contract and that the rest be paid to them. Twin Vision did not agree and never built a replacement house on the land.

On 7 August 2013, J and D served on Twin Vision a statement of claim seeking orders under the Contracts Review Act 1980. On 13 August 2013, a liquidator was appointed to Twin Vision.

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