AU2004100014A4 - A method of developing and facilitating real properties - Google Patents

Description

(r-n4-Ak) eIea90:91.(w:H) GWfj e!IsnfV dl Aq pSA!GoSH L.L999S00(-ljgflS :oNj1jCISf03 1 A METHOD OF DEVELOPING AND FACILITATING REAL PROPERTIES The present invention relates to development of real estate and, in particular, to a method of providing an incentive to buyers of new residential properties such that the buyers share in development profit and do not require to outlay a deposit.

BACKGROUND OF THE INVENTION In the property market, new buyers and others are finding it increasingly difficult to purchase new or existing properties due to high prices and the need to have a substantial deposit.

There is a need for a buying or development scheme which allows new or other buyers to be able to purchase property without the need to have a substantial deposit. It is 1a envisaged that such a scheme provides the buyer with an effective loan of expected development profit and a share of the capital gain of the property over a predetermined period whereby the facilitator who provides initial capital to the buyer's deposit and the buyer share in the capital gain and development profit to the advantage of both parties.

OBJECT OF THE INVENTION It is an object of the present invention to provide a method providing an arrangement or incentive to buyers of real estate properties or the like such that the buyers share in capital gain and developmwnt profit of property. At the very least, the invention provides an alternative to presently known methods and schemes.

DISCLOSURE OF THE INVENTION According to an aspect of the present invention there is disclosed a method of providing a purchasing arrangement to buyers of real estate properties or the like, said method including the steps of: vflWoCu8pMtWts~kotPM1 01 ic 01:91 too;/iO/;1 Zi.-LIO~OZ~(p-In-A) GIB90:91.(w:H) ewli:eIeJlsnV dlAq p9A!oQGN LSSSOO-IJ3flS ON CISf03O 2 a) forming agreement between facilitator and a buyer for construction of building or the like for a predetermined period; b) valuing a property including building to be constructed, the valuation price being sale price of property including the building to the buyer, the valuation price including Is development costs and profits; c) arranging funds to be used in purchase of property and construction of the building -from a lending institution, the fluids less the development costs and profits being a liability of the buyer, d) arranging for the construction of the building; e) upon completion of the building, commencing a predetermined period of occupancy of the property by the buyer or by the buyer's selected occupiers; f) upon completion of the predetermined period or conclusion of the agreement, revaluing the property in its completed form and determining increased value of the property; g) arranging to pay the facilitator a predeternined amount of the development profits and/or a predetermined amount of the increase in value of the property.

Preferably, buyer refinance. to the increased value of the property. I the preferred form, the buyer continues ownership, but in some circumstances, may elect to sell the property before or after the completeion of the predetermined period.

In a preferred form, the facilitator can before the completion or at the completion of the predetermined period arrange for the property to be sold. In other preferred forms, the facilitator can purchase equity in the property at the completion of the predetermined period for another predetermined period of time. Preferably the equity is in the form of a property trust.

I a preferred form of the invention, the liability of the buyer is mortgaged and the buyer agrees to repay predetermined repayments of the loan to the mortgagee.

3o Preferably, the development costs include associated costs such as fees, deposit bonds and other incidental costs. The development profits are preferably a percentage of the total sale price of the property.

01:9t PDO0/t0/aL Zg-L(o-pOOZ (P-Vn-Ak) a1eO 90:9L awI :e!IeJlsnv dl Aq PeApoo9N LL999900-IAS :ON OI SflOO 3 BRIEF DESCRIITON OF THE DRAWINGS An embodiment of the present invention will now be described with reference to the s drawings in which: Fig. 1 is a schematic flow diagram of a preferred embodiment of the present invention.

BEST MODE OF CARRYING OUT THE INVENTION A preferred embodiment of the method of the present invention is as seen in Fig. 1 and begins at step 10 where a facilitator of the method matches a proposed building construction on a site with a buyer. Once the buyer is engaged, the facilitator arranges for fimds to be loaned to the buyer from a lending institution with an approriate mortgage thereon. A builder is then engaged to construct the building.

At this step, the property is offered to the buyer at a market value which includes development costs and profits as well as the cost of the land following a first valuation.

This is established as an upon completion valuation as a sales price. This upon completion valuation is preferably undertaken by at least two valuers, one from the mortgagee and is intended to be used for mortgage security purposes.

Contracts are then exchanged after all statutory approvals are met. The facilitator advances all associated fees, deposit bonds and deposits and arranges construction funding. The buyer is not required to provide any funds to the construction costs.

The next step 20 is that the site purchase is settled and construction commences. The time lapse is usually four weeks settlement period. The facilitator arranges the construction of the building and preferably uses alliance partners in the construction process.

\sr'sA.VocspsIsnsoomp\13001.doc 0Z/O O!L1 900z/10/3l n-L-VOOZ(P-n-A) le 809L (wiHw-i) UIWjsfV diAq POA!GOGN LM9900-ISnYS:ON ci snoo 4 At about thirty weeks, the next step 30 is that the construction is completed and in step the buyers' mortgagee settles and a certificate of occupancy issues. The agreement formed by the facilitator and the buyer is such that the facilitator leaves its development profits in the project as a second ranking charge or mortgage over the completed property for not more than three years. The agreement stipulates that the facilitator is entitled to of capital gains attributable to the property over the three year period of the agreement, or any part thereof. The certificate of occupancy is the preferable commencemence date of the three year agreement. The agreement also stipulates a maintenance requirement to be followed. This can be enforced.

In the preferred form, the buyer at step 50 arranges for the revaluation and reznortgaging of the property, in effect arranging for the facilitator to be paid 50% of the development profit and 50% of the capital gain as seen in step 60. Naturally the revaluation is done so as to be fair to both the facilitator and the buyer.

is If the property is to be sold at the completion of the period, the buyer arranges the sale at least three months prior to the end of the period.

If the buyer defaults the agreement can stipulate that the facilitator be paid the full amount of the development profits. Likewise if the property is sold prior to the completion of the period, the agreement can stipulate that the facilitator recoup all development profits.

If the buyer is unable to afford the revised mortgage payments following the revaluation, the facilitator can arrange for a Residential Property Trust to take equity in the property for up to a period of seven years in the preferred arrangment. If at the end of this period the buyer is still unable to afford the repayments, the facilitator arranges to sell the property to recoup investment.

The method of the preferrcd embodiment has advantages such that buyers can buy 3o property without the need for a substantial deposit and can benefit from participating in development profits thereby saving up to 10% of the cost of a new property.

Wm~edocsipantsoomp13001 .doc Di/OL 01:91 tODE/LO/gt ZL-I.0-tOO OWO o:9L Gw!1:e!lenV dl Aq POA!GOBU~ L 999900-t1flS :ONcI sJNOc Another advantage is that the facilitator arranges the method and as such a one-stop shop type of service which saves daunting and time consuming dealings with a plethora of parties.

6 An advantage to the facilitator is that they participate in the capital gain of the property over the predetermined period of time, ie three years or a variation thereof.

In the preferred arrangement the facilitator can also provide property management services in respect of the properties under the scheme.

Throughout the specification and claims, the word "comprise" and its derivatives are intended to have an inclusive rather than exclusive meaning unless the context requires otherwise.

is The foregoing describes only some embodiments of the present invention, and modifications obvious to those skilled in the art can be made thereto without departing from the scope of the present invention.

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Claims (4)

1. A method ofproviding a purchasing arrangement to buyers of real estate properties or the like, said method including the steps of: a) forming agreement between facilitator and a buyer for construction of building or the like for a predetermined period; b) valuing a property including building to be constructed, the valuation price being sale price of property including the building to the buyer, the valuation price including development costs and profits; l0 c) arranging funds to be used in purchase of property and construction of the building from a lending institution, the funds less the development costs and profits being a liability of the buyer; d) arranging for the construction of the building; e) upon completion of the building, commencing a predetermined period of occupancy of the property by the buyer or by the buyer's selected occupiers; f) upon completion of the predetermined period or conclusion of the agreement, revaluing the property in its completed form and determining increased value of the property; g) arranging to pay the facilitator a predetermined amount of the development profits and/or a predetermined amount of the increase in value of the property.

2. The method according to claim 1, wherein the buyer refinances to the increased value of the property and the buyer continues ownership, but in some circumstances, may elect to sell the property before or after the completeion of the predetermined period.

3. The method according to claim 2, wherein the facilitator can before the completion or at the completion of the predetermined period arrange for the property to be sold, whereby the facilitator can purchase equity in the property at the completion of the predetermined period for another predetermined period of time and the equity is in the form of a property trust.

4. The method according to claim 3, wherein the liability of the buyer is mortgaged and the buyer agrees to repay predetermined repayments of the loan to the mortgagee. \servteW£octpaftcntp\13001doc O?/FL 11:91 to00/LO/?l ZI.-LO-VOOZ eOe O go .(w:H)ewij :eaIeJlsnv dlAq p9A!GoGa LL999900-I9MNS oaI SflOD 7 The method according to claim 4, wherein the development costs include associated costs such as fees, deposit bonds and other incidental costs and the development profits are a percentage of the total sale price of the property. DATED this TWELFTH day of JANUARY 2004 NORMAN WINSTON HEPBURN Patent Attorneys for the Applicant CHRYSILIOU LAW \serwvmXedocspatentlcomp\13001 .doe OZ/CI "i:91 too/Lo/zt 01/c I LI!9I pOOl/LO/EL