Real Estate Investment Property (REIP) is the name given to a group of property assets that can be sold for a profit.
REIPs are the preferred way to buy and sell your own home and can be used to buy or sell a property in Australia.
If you own a property or property asset, the REIP process can include: 1) a written statement that sets out your needs and expectations, including your property’s location and its needs, and 2) the purchase price (the amount you’ll pay for your property).
REIP’s are generally subject to a number of restrictions.
For example, you can’t buy your property from someone you don’t trust, and you can only buy it for a fixed term.
You can’t use your REIP to buy a property you already own.
If your property is in a private market, the owner can only resell it to you.
You’ll need to obtain an undertaking from the owner to sell the property.
If there’s a dispute between you and the owner, the dispute resolution process may be different to other forms of REIP.
Read more about the process.
If all goes well, your REIT will send you an email with instructions on how to buy your home, and will give you a deposit to cover the purchase.
REITs are required to register with the Australian Securities and Investments Commission (ASIC) to sell your property, and they may charge you interest on your deposit.
You should check if your REI’s registration is required by the ASIC before deciding whether to buy.
You’re expected to complete a declaration, known as a ‘consent document’, in which you agree to be bound by the terms and conditions of the agreement.
The document will also provide details of your property and the conditions it’s designed to protect.
REIs can’t sell to other people, but you may be able to transfer the property to someone else.
REITS can only sell to people who have the legal right to sell.
They can’t resell a property if it’s being used as a commercial property, or if it has been converted into residential property.
You may be eligible to transfer a property to a person who’s not your legal owner.
You don’t need to agree to the transfer if you’ve already purchased the property from an existing owner.
If an REI decides to sell a house you’ve purchased from them, it must give you at least 30 days’ notice of the sale.
If the property is sold to a buyer who’s already bought it, the buyer’s agreement will apply.
If a buyer doesn’t buy the property, the sale won’t be recorded.
If it’s sold to someone who doesn’t have the right to buy, they’ll need a consent document.
Read about buying property from a non-resident buyer.
You won’t need a ‘fiduciary’ declaration.
This is the formal agreement signed by both you and your REIs.
If neither you nor your REISA approves of the purchase, the transaction isn’t registered with the ASICS.
Read our article on how consent documents are used.
If we’re not clear about what we’re buying, you may have to pay more than what you paid for your home.
This isn’t a legal obligation.
You have the option of paying more to the REI, or to your broker to buy it from a REI.
Your broker will then give you instructions on the best way to sell it.
Read on about how to find out more about what you can and can’t do with your property.
What is a REIP?
REIP is different from a residential sale.
Residential sales are for real property, not your home (unless you’re a REIT).
REIT’s are registered companies that have the same name as the REISA, but they don’t hold any of the legal rights or obligations to the real property.
As such, they’re not registered with ASIC.
REIFs are companies registered with a government agency, and these agencies have the authority to sell REIF properties to third parties.
These agencies can buy REIF property from you if they can’t register a REIF.
This means you can buy your REIF from a third party if they’re unable to register a company.
REIS are a new form of REIF, and the name comes from the REIS business model.
They are now sold by a new REIS company, REI Reis.
In most cases, your new REIF company won’t have any ownership rights over your REIG, including REIP property.
Your new REI company is the same as a REIS, but it has the power to negotiate with other REIs to buy REIP properties from them.
REIs aren’t regulated by ASIC, so if you buy property from one, you’re responsible for the property’s safety.
If someone else buys your property for you, they might not be a REIG.
This could happen if they buy a REIC