FAQs

What is the primary intent and purpose of an EquityShield Purchase Option Contract?

The primary intent and purpose of an EquityShield Purchase Option Contract is to secure and lock-in the value of your property, so in the event of a property market downturn, the property owner is protected from losing any equity or profit.

What are the benefits to the property owner in securing an EquityShield Purchase Option Contract?

– Lock-in current market value.

– Protect yourself against future property value declines.

– EquityShield is available for vacant land, residential, industrial, commercial and specialised properties.

– As the property market rises, uplift the “agreed value” to lock-in your increased equity or profit.

What is an EquityShield Purchase Option Contract?

It is a contract that gives you, the holder of the EquityShield Purchase Option Contract (or the party to whom you may have assigned it), the sole discretionary right to exercise the EquityShield Purchase Option Contract, which then requires the Optionor (LIVN Pty Ltd) to purchase the property at the “agreed value” as described and set out in the EquityShield Purchase Option Contract.

Is EquityShield only applicable for a new property?

EquityShield can be used on either existing or new property.

Can I use EquityShield on a property I already own?

EquityShield is suitable for property you already own.

When can the EquityShield Purchase Option Contract be exercised?

The EquityShield Purchase Option Contract can be exercised any time after 2 years from commencement, up to the end of the 10 year term, provided the EquityShield Purchase Option Contract fee has been paid in full.

The 2 year “non-exercise” period referred to above, may be varied (longer or shorter) at time of initial application, with appropriate adjustment to the Option fee payable. Once an EquityShield Purchase Option Contract has commenced, variations to the “non-exercise” period are not permitted.

Why would I exercise the EquityShield Purchase Option Contract?

Primary reason is the property value has fallen below the “agreed value” and you cannot / or do not want to ride out the downturn in the property cycle.

Secondary influences on your decision to exercise your EquityShield Purchase Option Contract may include such events as:

– Relocation of you and / or your family.

– Loss of income.

– Illness.

– Liquidating your property portfolio.

– Local neighbourhood issues which could affect the property value for the foreseeable future.

– Realisation of Estate property assets.

Are there any costs if the EquityShield Purchase Option Contract is exercised?

There are no selling costs or fees payable by the holder of the EquityShield Purchase Option Contract, except their own conveyancing / legal fees.

What’s the process to exercise the EquityShield Purchase Option Contract?

After the 24 month “non-exercise” period, the Holder (or the assignee) can exercise the EquityShield Purchase Option Contract.

The process is simple and set out in the EquityShield Purchase Option Contract, but is summarised as follows:

Notify in writing, giving LIVN Pty Ltd 60 days notice of your intention to exercise. (Your decision is personal and is not required to be disclosed, but on most occasions it is because you feel the market value of the property is below the “agreed value”).

After your EquityShield Purchase Option Contract has been exercised, settlement of the sale of the property will occur in a timeline consistent with normal practice for your relevant State.

Is the EquityShield Purchase Option Contract assignable?

Yes, it is fully assignable throughout the 10 year term, to parties such as your mortgage lenders, estate beneficiaries / successors, or any new owners of the property.

Can I raise the “agreed value”?

The EquityShield Purchase Option Contract “agreed value” can be raised by mutual agreement to a new “agreed value” and payment of an additional fee on only the increment amount.

In most instances, there may well be a consequent adjustment to the period of time during which the EquityShield Purchase Option Contract cannot be exercised.

In this instance, the EquityShield Purchase Option Contract is supporting your “stop loss” position and locking in the new equity and profit.

What general conditions may affect the exercising of the EquityShield Purchase Option Contract?

It is the property owner’s responsibility to, at all times, maintain and insure the property.

In the event the property is not ‘reasonably’ maintained or is damaged and not repaired due to lack of insurance, then the EquityShield Purchase Option Contract may not exercisable.

What happens if I refinance my mortgage?

Your EquityShield Purchase Option Contract remains in force for the full 10-year term, regardless of who holds the mortgage.

Your mortgage and EquityShield Purchase Option Contract are 2 entirely separate agreements.

Can I increase my mortgage?

Yes, as the EquityShield Purchase Option Contract is over the property and has nothing to do with your mortgage.

How is the “agreed value” of the property established?

LIVN Pty Ltd use proprietary historical and actuarial analysis to determine the “agreed value” of your property.

LIVN Pty Ltd may require a valuation, but this is generally included in the fee and is usually payable by LIVN Pty Ltd.

What does EquityShield Cost?

Indicative costs for an EquityShield Purchase Option Contract for a residential investment property will be approx 3.5% + GST of the EquityShield “agreed value” if paid monthly over 24 months*.

* discounted to 3.0% + GST for a one-off up-front payment.

This pricing may vary dependant upon the attributes of the particular property.

Small cost ……… Substantial peace of mind!

Are there any up-front fees?

There are no up-front fees payable at the time of application for an EquityShield Purchase Option Contract.

A small commitment fee (to cover legal costs of preparation of the EquityShield Purchase Option Contract is payable, but only AFTER:

a. you have been provided with an Acceptance document, and

b. you have confirmed your intention to proceed with entering into the EquityShield Purchase Option Contract.

Valuation fees for your property are generally included in your EquityShield Purchase Option Contract fee, however, in certain exceptional circumstances, there may be a fee payable in that regard. In those circumstances, the matter would be discussed with you prior to any commitment.

How do I pay for the EquityShield Purchase Option Contract?

Either:

1. A discounted lump sum payment on execution of the EquityShield Purchase Option Contract,

OR:

2. A periodic payment plan over 24 months*. Full payment must be received within 2 years of commencement of the EquityShield Purchase Option Contract, otherwise your rights to exercise your EquityShield Purchase Option Contract may be voided.

* This alternative may not be available in all circumstances.

What happened during the GFC?

Since 2006, Inremco 26 Limited and subsidiaries have written in excess of 12,000 Purchase Option Contracts worldwide and traded successfully through the Global Financial Crisis (GFC).

Numerous contracts were exercised as a result of the GFC, saving Contract holders financial hardship or worse!

Should you seek professional advice before entering into an EquityShield Purchase Option Contract?

Legally, you are not required to take professional advice, as this is neither a financial services nor an insurance product. If you would feel more comfortable, you may choose to do so.

More specifically, the legal advice and legal opinions are summarised as follows:

The entering into the Purchase Option Contracts do not constitute the offering of “securities” by the Company. As a consequence of the Contracts not constituting the offering of Securities in accordance with the Corporations Act 2001 (Cth), there is no requirement of the Company to comply with the disclosure requirements as contained in Sections 704, 706 and 707 of the Corporations Act 2001 (Cth).

The entering into the Purchase Option Contracts does not constitute the provision of a “Financial Product” as defined in Section 763A of the Corporations Act 2001 (Cth) nor the offering of a “Financial Service” as defined in Section 766A of the Corporations Act 2001 (Cth).

As a consequence of the Contracts not constituting the provision of a financial product or the offering of a financial service by the Company, there is no requirement for the Company to maintain a financial service licence as required by Section 911A of the corporations Act 2001 (Cth), or be licensed by a financial services licence holder as required by Section 911B of the Corporations Act 2001 (Cth).

Can you show me an example of how EquityShield works?

Assume your property is worth $400,000 and EquityShield agrees with your market appraisal, then this will become the “agreed value” for inclusion in the EquityShield Purchase Option Contract.

By entering into the EquityShield Purchase Option Contract at this “agreed value”, you have secured and locked in the value of your property at $400,000 minimum.

In exchange for the one-time EquityShield Option fee, you can now rely on the EquityShield Purchase Option Contract to ensure that, as a minimum sale value for your property, you will receive the “agreed value” of $400,000.

You can exercise the EquityShield Option any time after the first 2 years, up to the end of the 10 year term.

There is no obligation, whatsoever, for you to sell the property unless YOU choose to do so! You now know the exact minimum you will receive if you decide to sell your property.

Should the market price rise for your property above the “agreed value”, then you are naturally free to sell on the open market.