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AU Homeowners give up their properties without knowing

Property Here - Tuesday, May 28, 2013

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THE South Australian Government will move to clear up laws which can lead to homeowners giving up rights to their property when they sign home improvement contracts.

The changes were prompted by cases reported last year in which homeowners who signed rent-to-buy contracts for solar panels ended up with a caveat on their home.

A caveat is a legal "stop notice'' which can prevent the homeowner from selling, renovating or securing a loan against their home without first clearing the debt laid out in the contract.

In the solar panel cases, the homeowners were not made aware of a charging clause in the contract which would allow the supplier to lodge a caveat on their property.

Business Services and Consumers Minister John Rau said the current "complicated and confusing'' laws meant homeowners could be misled or duped into giving up their property rights.

Mr Rau will introduce legislation to Parliament next month which will require any charging clause to be signed and witnessed separately from the rest of the contract.

Law Society of SA president John White welcomed the "sensible'' amendments.

Tindall Gask Bentley commercial lawyer Giles Kahl said charging clauses were often "buried in fine print''.

"For most people it never becomes an issue . . . (but) it can cause a lot of trouble if you're not in a position to pay out the contract,'' he said.

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