What is the difference between the Assemble Model and a ‘rent-to-buy’ model?
All rent-to-buy arrangements include two main components:
+ The ‘rent’ part—where a person lives in a property for a fee (including rent and other payments for occupying the property); and
+ The ‘buy’ part—where a person enters into a contract that provides the right to purchase the property. Rent-to-buy payments are then made, which can include a deposit and other payments.
Typically, a ‘rent-to-buy’ model requires residents to pay rent and other payments during their lease period with those other payments applied toward the purchase price. If residents decide not to purchase, in most cases, they may lose their deposit and any ‘other payments’ made. This isn’t fair and in recognition of this the Government of Victoria recently passed new laws under the Sale of Land Amendment Act 2019 (the Act), that prohibit these types of rent-to-buy arrangements whilst also permitting certain arrangements that they deem fair.
The Assemble Model is a ‘rent-to-buy’ model developed to provide a fairer approach to home ownership whereby your rental and purchase price are fixed and agreed upfront, so you have clarity around your fixed rental costs as you save towards your home deposit. You also have the option but not the obligation to purchase your home at the end of your five-year lease. Your rent is not applied to your deposit or purchase of your home and if your home does not live up to your expectations, you can exit the lease after the first 12 months or decide not to exercise your option to purchase without financial penalty. It is for these reasons that the Assemble Model is a permitted arrangement under the Act with all Assemble Documentation complying with the prescribed requirements of the Sale of Land (Exemption) Regulations 2020 (Vic) so as to permit this fairer approach to home ownership.