AU2006101006B4

AU2006101006B4 - A method of leasing an asset

Info

Publication number: AU2006101006B4
Application number: AU2006101006A
Authority: AU
Inventors: Peter Longmore
Original assignee: ISSHO Pty Ltd
Current assignee: ISSHO Pty Ltd
Priority date: 2006-11-29
Filing date: 2006-11-29
Publication date: 2007-01-04
Anticipated expiration: 2014-11-29
Also published as: AU2006101006A4

Description

1

AUSTRALIA

Patents Act 1990 ISSHO PTY LTD COMPLETE SPECIFICATION INNOVATION PATENT Invention Title.

A method of leasing an asset The following statement is a full description of this invention including the best method of performing it known to us:- A Method of Leasing an Asset Field of the Invention This invention relates to a method of leasing an asset, and more particularly relates to a method of leasing real estate.

Background of the Invention With the rapidly rising cost of real estate and rent of properties, it is extremely difficult for first home buyers to enter into the real estate market. This is particularly so in view of ever increasing interest rates and the minimum deposit required for purchase of a property, usually 10%, which is taken out of the funds from the home buyer with the balance usually being paid by a lender, such as a bank or building society. Thus at present a new home buyer wishing to enter the market has to find funds at least to the value of 10% of the property, which in some urban areas can be in excess of $40,000 and then worry about any interest rate rises if they are not locked into a fixed interest rate scheme.

The present invention seeks to overcome these disadvantages by providing a method of leasing an asset, such as a property, from a lessor to a lessee whereby the purchase price of the property is shared between the lessor and the lessee. After a set period the lessee has the option to sell their share in the property back to the lessor and the lessor has an option to offer to buy back the lessee's share in the property prior to any set date at a higher negotiated price.

Summary of the Invention According to an aspect of the invention there is provided a computer implemented system comprising: a computer program for enabling the entry and maintenance of information pertaining to a lease of a property between a lessor and a lessee; a memory for storing the information; and a processor that arranges the storage of the information in the memory under the instructions from the computer program; wherein the lessee and lessor each pay a percentage of a purchase price of the property, the lessee paying their respective percentage to the lessor in return for a lease of the property for a set period; 170507_1.doc NI wherein further the lessor pays the lessee an amount greater than or equal to the Zvalue of percentage of the purchase price paid by the lessee when the lessee relinquishes the lease; the information entered and maintained by the computer program including the percentage of the purchase price paid by each of the lessee and the lessor, the set period N and the amount to be paid by the lessor when the lease is relinquished either at the end _of the set period or at one or more specified times less than the set period; Sthe lessor and lessee each having access to the computer implemented system.

I When the lessee relinquishes the lease at a specified time of the one or more specified times less than the set period, the lessor preferably pays the lessee an amount greater than or equal to the percentage of the purchase price paid by the lessee, which amount is provided in the lease at the specified time.

The lessor may be able to buy back the lease from the lessee at a time other than the one or more specified times provided that the offer to buy back is at a negotiated price that is higher than the price at the last specified time that the lease could have been relinquished by the lessee.

The computer program may arrange the sell back amounts based on agreed percentages negotiated between the lessor and the lessee in accordance with the terms of the lease.

The information entered and maintained by the computer program may further include the one or more specified times less than a set period in which the lessee can relinquish the lease, the original property value, the original lessee purchase price and wherein further the set period is preferably 50 years, the percentage of the purchase price paid by the lessee is preferably 50% of the property value and the one or more specified times less than the set period is preferably 5 or 10 year intervals after 10 years has elapsed from the date of the purchase of the property.

Brief Description of the Drawings A preferred embodiment of the invention will hereinafter be described, by way of example only, with reference to the drawings wherein: Figure 1 is a block diagram of a computer processing means used to store and access data associated with a particular asset, such as real estate property; Figure 2 provides examples in tabular form of an agreed sell back price to a lessee at predetermined time intervals; and Figure 3 is a flow diagram showing the process of setting up a lease and the options available for purchasing and selling a real estate property.

170507_1.doc Detailed Description of the Preferred Embodiments Referring to Figure 1 there is shown a computer processor 100 that includes a monitor 110, a disk drive and storage system 120 and keyboard 130. The processor 100 may alternatively be linked to a database 150 through server 160.

The processor 100, and more particularly the memory associated with the processor 100, stores data on an asset over which a lease agreement exists between a lessor and a lessee. The asset in this particular case relates to a real estate property and the data discloses a sell back price from the lessee to the lessor at predetermined intervals.

In purchasing a real estate property an agreement is made between two parties, being a lessor and a lessee, to share the cost of purchasing the property. The property 170507_l.doc IO 4 may be residential or commercial. The sharing of the costs is generally 50% each 0 however this may be made in different percentages upon agreement by both parties.

Z A lease agreement is then signed between the two parties specifying a sell back price that the lessor offers the lessee at set intervals, usually five or ten years over the set period of the lease. However the option to sell the share of the lessee back to the ISO lessor will not be available generally until at least ten years from the date of purchase.

The sell back price or that portion owing to the lessee will be at a value greater than or equal to the purchase price, after ten years or the first set period. Thereafter each subsequent set period, for example every five or ten years up to the set number of years

INO

010 defined in the lease, will have an increased sell back value to the lessee compared to the 0 N, previous set period. For example with reference to Figure 2 in the first set of figures, ten years after the purchase price the agreed sell back price is $150,000, that is, equal to the lessee's purchase price. With every increasing period of five years it is seen that the sell back price also increases up to a maximum of $450,000 after fifty years.

During the period of the lease the lessee can live in the property and may make improvements to the property with written consent from the lessor. The lessee will pay all of the outgoing expenses including insurance, rates, gas, electricity, water, telecommunication charges and maintenance. An added bonus is that the lessee will pay no rent for the term of the lease.

The lessee may sub-lease the property to another party and this can attract rental fees that can be payable either directly to the lessee or by agreement to the lessor as well. As with a commercial rental property, the only outgoing expenses incurred by the lessee or the lessor will be the maintenance of the property, insurance and rates.

The lessor has an advantage as well in that over time they will derive a profit from the sale of the property. Throughout the whole term of the lease the lessor is the outright owner of the property. Thus it is an investment on the part of the lessor and also on the party of the lessee. During the lease agreement, the lessor will guarantee the agreed sell back prices at the set times and will have no option but to purchase the lessee's share of the property if the lessee wants to sell at the set time. The lessor however also has the option to offer to buy back the lease or the share that the lessee has in the property, at a time other than the specified set dates at a higher negotiated price than the last agreed sell back price at the last set time. The lessee must agree to such a negotiated price for the sellback to occur. Thus for example if, referring to Figure 2 again, the lessor wishes to buy back the share that the lessee has in the property at year 12, referring to the first set of data 220, then the negotiated price must be higher than $150,000 (at year m:\specifications\500000\505000\505058innovreo.doc NO With reference to Figure 2 there is shown a spreadsheet 200 comprising three o sets of tabular data 220, 240 and 260. Each set of data is similar in that there is a Z column listing the specified times within the set period, a further column listing the corresponding sell back price for each specified time and another column listing the percentage of the sell back price compared to the lessee's purchase price of the IDproperty. The property value and the lessee purchase price is listed at the top of each O table. Thus it can be seen that with respect to the first set of data 220, by the fiftieth year or last year of the lease agreement the agreed sell back price has increased 300% on the original lessee purchase price, and in the next set of data 240, by the fiftieth year, it has increased by 325% and in the final set of data 260, at the fiftieth year, the sell back price has increased by 500% on the original purchase price from the lessee.

The data in the spreadsheet 200 may be stored in the memory of the computer processor 100 or alternatively be stored in an external database 150 accessed through server 160. The data is able to be accessed by both the lessee and the lessor and can also be stored or accessed by an agreed third party.

With regard to Figure 3 there is shown a flow diagram 300 of the process involved in purchasing a property, setting up a lease and then the possible options available during the term of the lease.

Firstly at step 305 the intended owner of a property advertises for interested persons to share in the purchase of the property. The intended owner may have already purchased the property and then seeks an interested person to pay a percentage of the purchase price. At step 310 the intended owner (or actual owner) and an interested person, who will become the lessee, purchase the property. This will usually follow a Memorandum of Understanding (MOU) or similar agreement as to the proportionate amounts payable by each of the parties. Shortly thereafter at step 315 a lease agreement is prepared and signed by both the lessor and lessee, including details on the sell back prices at corresponding set dates available to the lessee should the lessee decide to sell their share in the property to the lessor. The set dates are usually in intervals of years, typically five years or ten years up to a maximum lease term of fifty years from the purchase date of the property. However, it is to be noted that any period of time of duration of the lease can be agreed between the lessor and lessee as well as the specified times for sell back. Furthermore the percentage of the purchase price of the property payable by each of the lessee and lessor can be made variable and not just each.

At step 320 the details of the sell back values, the set dates, together with any other relevant statistics, such as the percentage sell back value, are entered into the m:\specifications\500000\505000\505O58innovreo.doc O 6 memory of a computer processor 100 or database 150 using a computer program which 0 is accessible to both the lessor and lessee. The computer program thus instructs the Z computer processor 100 to enable entry into the memory, information on the lease between the lessor and lessee, including the period of the lease, one or more specified times less than the lease period at which the lessee can relinquish the lease, INO corresponding sell back amounts payable by the lessor to the lessee, the original O property value and the original purchase price of the property. The computer program also enables the lessor and the lessee access to the stored information.

If at step 325 the lessee wishes to sell their share in the property to the lessor at a predetermined set time then the process moves to step 340 where the lessor pays the agreed amount to the lessee for that set time. If the lessee does not wish to sell their share then the process moves to step 330 and the lease continues until it expires at step 335. When it has expired then the process moves to step 340 where the lessor pays the agreed amount to the lessee after year fifty. Otherwise if the lease has not expired then the process moves to step 325.

If at decision 345 the lessor wishes to buy back the full share of the lessee in the property, at any time after the initial ten years of the lease and at a time other than a set time, then the process moves to step 350 where the lessor pays the lessee an agreed increased negotiated price and at step 355 the lease is terminated. Should the lessor not wish to purchase the lessee's share then the process moves to step 325.

The present invention provides an affordable way for first home buyers, retirees and young families to secure accommodation of their choice and having the security that in years to come they will make a substantial profit on the original purchase price of the property. For lessees using the present invention, it provides a saving over a period of time when compared to the total rent they would pay at market rates if they did not agree to a lease under the present invention. The invention also provides benefits to the lessor as they will be able to make a profit on their investment and have the option to buy back the lessee's share in the property during the lease.

It will be appreciated by persons skilled in the art that numerous variations and/or modifications may be made to the invention as shown in the specific embodiments without departing from the spirit or scope of the invention as broadly described. The present embodiments are, therefore, to be considered in all respects as illustrative and not restrictive.

m:specifications\500000\505000\55O58innovreo.doc

Claims

1. A computer implemented system comprising: a computer program for enabling the entry and maintenance of information pertaining to a lease of a property between a lessor and a lessee; a memory for storing the information; and a processor that arranges the storage of the information in the memory under the instructions from the computer program; wherein the lessee and lessor each pay a percentage of a purchase price of the property, the lessee paying their respective percentage to the lessor in return for a lease of the property for a set period; wherein further the lessor pays the lessee an amount greater than or equal to the value of percentage of the purchase price paid by the lessee when the lessee relinquishes the lease; the information entered and maintained by the computer program including the percentage of the purchase price paid by each of the lessee and the lessor, the set period and the amount to be paid by the lessor when the lease is relinquished either at the end of the set period or at one or more specified times less than the set period; the lessor and lessee each having access to the computer implemented system.

2. A computer implemented system according to claim I wherein when the lessee relinquishes the lease at a specified time of the one or more specified times less than the set period, the lessor pays the lessee an amount greater than or equal to the percentage of the purchase price paid by the lessee, which amount is provided in the lease at the specified time.

3. A computer implemented system according to claim 1 or claim 2 wherein the lessor is able to buy back the lease from the lessee at a time other than the one or more specified times provided that the offer to buy back is at a negotiated price that is higher than the price at the last specified time that the lease could have been relinquished by the lessee.

4. A computer implemented system according to any one of claims 1 to 3 wherein the computer program arranges the sell back amounts based on agreed percentages negotiated between the lessor and the lessee in accordance with the terms of the lease. 170507 1.doc A computer implemented system according to any one of claims 1 to 4 wherein the information entered and maintained by the computer program further includes the one or more specified times less than a set period in which the lessee can relinquish the lease, the original property value, the original lessee purchase price and wherein further the set period is 50 years, the percentage of the purchase price paid by the lessee is of the property value and the one or more specified times less than the set period is 5 or year intervals after 10 years has elapsed from the date of the purchase of the property. Dated this twenty-sixth day of July 2007 Issho Pty Ltd Patent Attorneys for the Applicant: F B RICE CO 170507_ l.doc