Perth rent-to-buy property scheme promoters hit with injunction ahead of trial

Western Australia's consumer watchdog Consumer Protection has won a legal victory in its campaign against rent-to-buy property schemes with the operators of served with a Supreme Court interim injunction preventing them from engaging in alleged misleading and deceptive conduct.

The injunction is in place until a trial takes place in relation to the allegations made against the operators of the website - siblings Patricia Mirawati Susilo and Bryan Artawijaya Susilo of Applecross.


WA’s Consumer Protection also alleges that they are operating as real estate agents without the required licence.

Bryan Susilo told Property Observer he would not respond or comment until Consumer Protection "adjusted" their media statement.

"It's not what the judge actually ordered," he said.

A spokesperson for Consumer Protection told Property Observer there would be no changes to its press release, issued on June 10.

"Our media statements go through a rigorous approvals process, which includes our Legal Unit, before release and we believe it is an accurate summary of the Court Orders.

"There are no plans to retract or amend the release," he said.

Consumer Protection sought the injunction in October last year, after alleging that the Susilos engaged in misleading and deceptive conduct in breach of Australian Consumer Law.


On a video on the site, the Susilos refer to their business as "your friendly real estate pawn shop".

Consumer Protection alleges that the Susilos accepted wedding rings and various family collectables, including a Real Madrid football jersey signed by David Beckham, in cases where tenant/buyers could not afford the upfront fees.

Rent-to-buy schemes are targeted at people who don’t qualify for home loans. Buyers agree to pay rent to the seller in return for being able to purchase the property at a later date.

While they are not illegal they have come under increasing scrutiny from regulators.

Consumer advocate Neil Jenman, a long campaigner against rent-to-buy schemes, calls them “dangerous scams” that are “designed by predators who prey on the poor”.

“They are a complete rip-off and should be outlawed," Jenman said in 2007.

In February Consumer Protection lodged a Supreme Court writ against the promoter of another rent-to-buy property scheme, alleging the company and its director misled consumers, after a tenant/prospective buyer allegedly sold an above-ground swimming pool, valued at more than $16,000, despite not being the owner of the property.

The Susilos describe themselves on their website as "part of a group of real estate investors who buy residential property in all areas throughout Australia! Any price, any condition!"


Other statements in the Frequently Asked Questions section of the website include:

Q: Why should I contact you?

"We can buy your house fast. Agents can't.

Q: If you buy my house before the banks foreclose, will that save my credit?

 Selling your house before foreclosure is finalized may prevent foreclosure and/or bankruptcy from appearing on your credit report, which is usually better for your credit (think of it as amputating an infected leg to save your life)."

The interim injunction granted to WA’s Consumer Protection requires that the Susilos publish statements on their website "clarifying the nature of their business and clearly outlining the purchasing and rental arrangements for the properties they are advertising for sale under the scheme".

It requires that they "make the terms of their contracts clearer to consumers in relation to the ownership of the property and the purchasing arrangements between the owner and prospective buyer/tenant".

"They must also provide purchasers with a notice setting out a payment schedule and timeframe, as well as outlining the consequences should the buyer/tenant not be in a position to purchase the property at the end of the contract period," said WA Department of Commerce in a statement.

"Claims in their advertising that a loan from a bank or other financial institution is not required to purchase the homes will need to be qualified with “Bank or other financial institutions aren’t required to assist in all cases”.

"The injunctions prevent the promoters from representing that they own or have interests in properties unless they are the owner or have the represented interest.

"They must also indicate that the sale price and instalment payments being advertised are approximate amounts only.

"The promoters must provide both owners and prospective buyers/tenants with a written notice stating the exact nature of the scheme they are proposing, at least seven days before any contracts take effect."

Commissioner for consumer protection Anne Driscoll said the injunctions will give greater clarity to those who might be considering this particular scheme.

“The Supreme Court’s decision acknowledges the need for greater clarity about these complex rental and purchase arrangements and the need for both parties to know their rights and financial obligations before signing any contracts,” she says.

“We would urge anyone who is contemplating a rent to buy property proposal to seek legal and financial advice before committing to a contract, as there are many aspects of these schemes that require careful consideration.”

“We would strongly recommend that, if buyers or sellers of WA properties decide to deal with an intermediary, they only deal with licensed real estate agents. This gives much greater protection as there are laws that are designed to uphold consumer rights and safeguard their financial interests.”

In August 2011, the Commissioner warned consumers about rent to buy property promoters No Loan Home Pty Ltd (trading as Perth’s Easyhomes WA), its sole Director Filip (Fil) Butkovic and employee Nikola (Nik) Butkovic.

In May 2012, the Supreme Court ruled the scheme was illegal because the promoters were not licensed real estate agents.



Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer


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