Companies slapped with fine over property scheme

Invercargill Property Management, Newfoundland and Southern Housing Group were fined $38,500, $13,500 and  $10,300 respectively and also ordered to pay reparation to those affected by the scheme. 

From February 2003 to January 2005, Invercargill Property Management, which was employed to promote properties owned by Newfoundland and Southern Housing Group, marketed a scheme which led people to believe that they would be buying their own homes.

The scheme was aimed at people who were renting homes and who would not ordinarily be able to get a mortgage through a standard lender such as a bank.

In exchange for occupying a property, customers entered into a 30-year instalment agreement with the registered owners of the properties and paid weekly instalments of principal, interest, rates, taxes and insurance.

The occupier also agreed to pay for any repairs that the property required. It was not made clear to the occupier that this agreement did not give them legal title over the property until all the money had been paid in full at the end of the 30-year period.