Commerce Commission warning on rent-to-buy housing

The Commerce Commission is warning people buying houses under rent-to-buy schemes to make sure they get the full protection of the new Credit Contracts and Consumer Finance (CCCF) Act.

After a complaint from Waikato where a buyer wasn't given all the required information about the contract, the Commerce Commission today said house purchasers should get independent advice before they signed up to a rent-to-buy contract.

"The rent-to-buy schemes are not illegal," said Commerce Commission acting general manager, Peter Taylor.

"However, in many instances they have features which meet the definition of a consumer credit contract and the commission recommends that purchasers get independent legal advice to ensure their position is protected," he said.

"We have also written to a number of rent-to-buy scheme providers throughout the country reminding them of their obligations to consumers under the terms of the CCCF Act."

Under the act, consumers are entitled to minimum standards of contractual terms and to be given key information about consumer credit contracts.

That information included details of all fees and charges and the total interest payable under the contract.

In addition the act gives consumers the right to cancel within a short time after having entered into the contract and to repay the amount outstanding at any time.

- NZPA