A Guardian Right property share does not fit neatly into either joint tenancy or tenancy in common. Instead, it is deemed as an equitable interest. An equitable interest refers to the right of an individual to benefit or profit from a property or asset, even if they do not have legal title. Therefore, the Guardian Right property share is considered an equitable interest rather than a form of legal co-ownership like joint tenancy or tenancy in common.
When you own land, you can act as a trustee for another party to whom you wish to give an equitable interest. As a trustee, you hold the legal title to the land and manage it according to the terms of the trust created by a Terms Agreement. The Guardian as a beneficiary would have rights and responsibilities designated by those terms.
The Terms Agreement establishes two specific shares on one existing property hereby separating the Land from the Fixtures (existing or to be built) designating exclusivity, special conditions, values, rights, responsibilities and expenses.
And the Terms provide clarity on occupancy, financial contributions, dispute resolution, legal compliance, and termination conditions, all of which are transferable to successive owners.
A Guardian Right is an equitable interest in a property, restricted to the fixtures of the property which includes: the house, sheds, fencing, pool and driveway etc.
The Guardian Right is also a depreciating asset, reducing at 10% per annum calculated monthly stemming from the original value of the asset, fixing the price for all future sales.
And the Guardian Right is subject to Call Options, providing the landholder Options to buy the equity back at designated times for the price fixed by the depreciation schedule.
To this agreement, the Guardian Right is known as Share B.
Specific Shares.The shares of each property under this agreement are as follows.
Share B. is a ‘restricted’ share, meaning it has restrictions relating to its ownership.
Share B. Guardian must occupy the property and cannot use the property as a rental.
Share B. is a depreciating asset which reduces by 10% per annum calculated monthly on the 1st day of each month. This creates a fixed market value for the life of the ‘Guardian Right’ to be used at every exchange.
Share B. occupancy is restricted through Call Options which provide dates when Share A. has the right to purchase Share B and for the price determined by the depreciation schedule.
Share B. has a 99% right to owner occupy.
Share B. can rent rooms while an owner occupier but cannot vacate the legal responsibility and turn the property share into a rental property.
Should Share B. vacate and turn the property into a rental, Share A. will be entitled to the rental proceeds.
Share A. holds a 1% occupancy right but waives the right to occupy.
The 1% right is for a tenant of the land but not included in the Guardian Right agreement. Should there be existing occupancy upon the land, such as caravans, cabins, and tiny homes this must be declared to the Guardian who shall provide a 1% right of occupancy and unimpeded access to their place of residence.
Any tenant not included in the agreement, for the purposes of sewer, power, or water consumption must not impede the Guardian, under which all costs, revenues and responsibilities are borne by the trustee, landholder Share A.
Share A. has the 1% right to change occupants not included in this agreement.
Share B. can rescind the 1% occupancy right if there is no existing tenant not included in this agreement at the time of purchasing the right.
Share A. is responsible for 100% of the land rates, taxes, and lien expenses related to the landholding specifically.
Share B. is responsible for 100% of the water rates and the repairs and maintenance expenses relating to the house, shedding, pool, driveway, and fencing, and any lien relating to the Right.
A ‘Guardian Right’ value originally stems from the CIV (capital improved value) of the rates notice and can include a valuer’s valuation to increase this value if required.
The CIV on the rates notice covers the appurtenances, the (depreciable fixtures) upon the land.
Once this value is registered at the Guardian Right Registry, the guardians Deed of Right automatically decreases in value by 10% per annum calculated monthly on the 1st day of each month.
This telegraphs a fixed value and sale price for every future Guardian Right exchange. Land prices do not follow this process. Landholders can charge what they want.
It is the Duty of all Guardians to maintain and or improve the habitability of the property.
Share A. (the land) is registered at the Land Titles Office, forming the trustee over Share B. whose equitable interest is registered at the Guardian Right Registry.
A confirmation Deed of Right is provided for Share B.s records.
Each time a Guardian Right is exchanged, a new Deed of Right will be issued to the new owner and the previous deed to the same property becomes null and void.
A Deed of Right is also the receipt of the Share B. agreement from the Guardian Right Registry.
Share A. holds Call Options over Share B.
Share A. sets the first option date, after which the option date renews itself in 10x10x10 year intervals.
Once the first option date is recorded it is fixed into the system on both shares, and the depreciation schedule for the share designated House is automated.
Share B. has agreed to sell the property share for the depreciated price at these future dates should a call option be exercised.
Share A. must notify and provide Share B. with no less than 3 months’ notice that a Call Option will be exercised.
Share A. will provide the automated sale and purchase agreement prefilled with the names and value of the sale, to be confirmed by share B.
Both shareholders have the right to sell their share at any time.
Share A. must offer the property share to Share B. prior to listing it on the open market.
Share B. has the first Right of Refusal.
Share B. must offer the property share to share A. prior to listing it on Marketplace.
Share A. has the first Right of Refusal.
Share A. may begin the process to terminate this agreement by purchasing Share B. under Option and complete the exit form process to make it official.
Share B. may terminate this agreement by buying Share A. and complete the exit process.
Until the exit process is completed, this agreement is still binding.
The Guardian is to provide the incumbent Guardian with ‘vacant possession’.
Vacant possession should include mown lawns and a home in good working order.
Possessions left at the premises will be deemed as gifted to the new owner.
Any tenancy not included in this agreement but attached to the property: such as caravans, cabins, and tiny homes, must be shown on paper as the property of Share A.
Details of the occupancy, (pictures and tenancy agreement) and the responsibilities of these tenants for rubbish, water, sewer, power etc must also be recorded and honoured.
Share B has no right to refuse this occupancy. (what was in place, stays in place) but has the right to charge Share A. for rubbish water sewer or power if connected to Share B. this should be determined prior to the Guardian Right being established.
Share A. may sell this property at any time, and provide the ‘Right of First Refusal’ to Share B.
Share A. has the right to execute a Call Option.
If the Call Option is to be executed, the Guardian must be given no less than 3 months’ notice in writing.
If the Call Option is not taken, the Guardian may continue to reside at the property until this agreement is terminated.
In the case of Vacant land, Share A, has the right to refuse the type of dwelling that is to be built.
With existing fixtures not included in this agreement, these must be self-contained to remain the domain of Share A. or there must be documented evidence to the costs and responsibilities of these tenancies to affect the peace and security of Share B.
Share A. does not warrant the condition or habitability of the house.
Share A. is responsible for occupants’ actions and behaviours not included in this agreement at the property and reserves the right to change occupants with the same terms and conditions as the previous occupants.
Share B. cannot remove or relocate fixtures from this site address, and the landholder’s options to purchase the property share cannot be removed.
Share B has the right to sell or pass in Will, the property at any time for the prescribed price determined at that time.
The Guardian must reside at the property, and has the right to rent rooms, plant veges, have pets and make additions subject to council regulations.
A Guardian cannot vacate the property and use it as a rental.
A Guardian may not or demolish any fixtures from the property except during repair or through council approved additional works.
Share B. is responsible for 100% of the water rates.
Share B. is responsible for the upkeep of the vegetation and trees, and any damage relating to falling or protruding limbs from the property in an event.
Should the property be damaged by an act of God, (fire, flood, quake, hail, or accident) and insurance is engaged, repairs will be seen to be taking place.
Share B. is bound by a Call Option, and If the option is not taken, the Guardian may continue to reside at the property until terminated by way of a Sale.
If the Call Option is taken, no less than 3 months’ notice must be given in writing by Share A.
The value of Share B at the time of the Call Option being executed shall be determined by its earlier purchase price less 10% per annum depreciation calculated monthly.
Share B. does not warrant the condition or habitability of the house.
A Guardian will pass the property with Vacant Possession.
The Call to execute the Option must be sent no less than 3-months prior to the Option date being excersised.
If the Call Option was said not to have been received and was proven to be sent (registered delivery) prior to the 3-months’ notice cut-off, then the sale to Shareholder A. will proceed.
If no call is made or registered letter sent, the Guardian’s time to occupy will be extended by a further 10-years.
Old mortgages over property include Share A land, and Share B fixtures, so it is the responsibility of the landholder to pay down the mortgage from the sale of Share B and inform the lender of the equitable interest now in place.
Share B. has the right to opt for a caveat to protect his share if required.
Share B. has the right to finance.
Share B. cannot include the landholding belonging to Share A. if obtaining finance and to do so is to commit fraud.
Party A. shall not be legally responsible for Party B.
Although a Guardian Right covers real property under the act, the finance made available shall be personal, based on the reducing value of the use of the property.
To limit risk, financiers are required to use straight-line reducing loans, a fixed full-term interest rate, a 50-week year, and a 10-year maximum term.
Financiers should also align their repayments to market rent and work out the interest rate on the occupancy term based on the closest call option date.
Guardian Right financiers should also include a provision to enable the Guardian to pass the debt with the property use (if required) due to the rest of the terms staying unchanged.
On the sale of Share B. all debts must be settled or transferred.
Party B. is not legally responsible for Party A.
A ‘Development Right’ is permitted over vacant land for the purposes of a Guardian developing the land subject to council conditions.
Share A. has the final say as to what type of dwelling can be built on the land and where.
A Development Right is used instead of a Guardian Right which still leads to Guardianship and provides a Deed of Right on completion.
The total cost of the building, including permits and approvals shall replace the $5000.00 value of the ‘Development Right’ with this ‘new total cost value’ and the registry will be reset. This means if the total cost was 300k which included the 5K value, then the 300k will become the new value of the Guardian Right.
The Call Option date may be changed by mutual agreement on a Development Right only.
Development Right.
For building works on vacant land or the rebuilding of Derelict structures, the signing of a Development Right over the property should be used instead of a Guardian Right for the protection of both parties to include a scope of works, contract price, and completion date of the project being undertaken.
The development right is valid for 1 year only, so the project must have commenced and been completed within this timeframe.
The new value of the Guardian Right shall be determined by the contract price of the project to begin on the projected completion date.
The Development Right determines what will be built and where, with the cost of works determining the Guardian Right value upon completion.
If the building works have commenced and are incomplete, an extension of 6 months only will be granted after which the Development is voided, and the developer loses all rights.
The penalty for not completing the project within the alloted time, is shown when the Deed of Right is issued, will be dated from the commencement/ purchase of the Development Right rather than the Completion date.
Derelict houses.
A Guardian Right or Development Right is permitted over existing derelict dwellings.
The Guardian Right shall be sold for $5000.00, and the cost to repair and renovate shall be borne by the Guardian or Developer of the property.
With derelict dwellings, if power, water, and septic are required to complete the rebuild, a scope of works, cost estimate and completion date should be provided so the total cost of the project will have the correct value of the right and time that the value will be set to.
Call Options can be negotiated if the Development Right is used.
For houses in flood zones that have become uninhabitable, a Guardian Right or Development Right can be used.
Being uninsurable, the cost of this property share shall stem from the CIV of the rates notice or can be sold for $5000.00. No increase in property valuations will be recognized on the Deed.
Under a Guardian Right the cost to make them habitable again will be calculated against the Call Option minimum term of residence.
Under a Development Right, a scope of works, cost estimate and completion date will be required, and a new value will be shown on the Deed.
Use the Call Option Calculator to see which one works best for you.
Share A. and Share B. are clearly defined with the paper trail and the Deed of Right to prove the specific ownership and responsibilities.
Should a Guardian be under financial stress, the Guardian can at any time sell the Right with vacant possession under the Terms Agreement.
Guardian debt and the value of the property are designed to align, allowing the debt of the property share to be passed to an incumbent Guardian under investor terms if agreed.
Should the Guardian act unlawfully and the property is damaged, not maintained or not repaired in a timely fashion (3-months only), then the guardianship can be sold by the Registry under terms and without prejudice, and a Sherriff can be used to evict the previous owner. See Fair and equitable Future Value clause.
Should the property be damaged by an act of God, (fire, flood, quake, hail, or accident) and insurance is engaged, repairs will be seen to be taking place. No further changes.
Should the Guardian vacate his post and the property is rented, we have a ‘tenancy dispute’.
Tenants renting a Guardian property where a Guardian has vacated, can apply to the Guardian Right Registry to become the new owners. see share B restrictions.
The Guardian Right Registry is provided with permissions to enforce the terms and conditions of the agreement by all parties, can exchange one Guardian for another if necessary.
The Guardian Right Registry uses this agreement as guidelines rather than rules, some which remain fixed, and others which have leeway to create trust.
Trust is cultured and provides room to move when laws are rigid or grind up against others where there can be no true outcomes.
With State and Territory laws changing from state to state, placing equitable interests in dispute, then a provision to act as tenants-in-common can be included which includes a $1 p/a fixed remuneration for the 10x10x10 year term. This is not included in the agreement but can be.
This Guardian Right Terms Agreement may be updated from time to time. Check version number. Current No. V-02