Do you need a Licence to BUY property using vendor finance or lease options?
This question comes up ALL. THE. TIME.
The answer is, NO, not when you are BUYING property this way.
Think like you are buying a property the ‘traditional’ way. Do you need a licence to buy a property?
Of course not.
Do you need a licence to sell your own property?
Of course not.
And what if it is a lease option? If you are entering into the lease option yourself, as a personal investment strategy, you will NOT need a licence. So… if you are using vendor finance and lease options to build your own portfolio, then no, you do not need a licence.
So, when do you need a licence and what licence do you need?
When you are in the business of doing lease option deals as a business… so you are putting together deals for others and getting paid…
…you are acting as a real estate agent, so you will need a real estate licence.
If you are putting together vendor finance transactions as a business, then you will need an Australian Credit Licence (ACL). This is if you are SELLING multiple properties, or assisting others to sell using a vendor finance strategy and you are a business.
But you can sell your own property with a vendor finance strategy without an ACL.
Now, Lease Options are not credit contracts, so you DO NOT need an ACL.
…if you are BUYING property using vendor finance or CONTROLLIING property for your own portfolio using Lease Options, then you DO NOT need a licence.
If you are in the business of doing these types of deals and profiting by SELLING property with vendor finance, then you will need an Australian Credit Licence and a Real Estate Licence.
If you ARE in the business of doing Sandwich Lease Options then you will need a real estate licence.
At this point , if you are buying solely for your own investment portfolio, you do not need a licence.
Now, I am not a lawyer, so I recommend that if you decide you want to set up a business and sell multiple properties using vendor finance and/or lease options, then check with your lawyer regarding your individual plans and make sure you are covered.