The Guardianship Housing System
Guardianship is specifically designed to benefit owners, occupants, and investors, while delivering broader social advantages.
Pioneering the 'Guardian Right'
Aussie Property Guardianship has evolved into an inclusive housing system that serves all parties involved in property transactions. The need for a marketable tool that aligns with societal objectives to reduce housing costs led to the creation of the Guardian Right. This innovative concept acts as a bridge between renting and property ownership, designed to resemble ownership without altering the property title, thereby establishing a distinct housing market.
Through a Terms Agreement, 'existing properties' can be divided into two components: the land and the fixtures. This separation allows the land to appreciate or depreciate as usual while introducing a new pathway for fixtures (the house) to decrease in value. Owners can now adjust prices based on personal reasons, creating numerous strategies and opportunities for owners, guardians, and investors to utilize existing properties in a customized manner tailored to individual needs. How will governments and charities respond?
The Guardian Right stands out by defining a physical interest in the form of appurtenances or the 'bundle of fixtures' on the land, differing from a common numerical percentage recorded on the property title. Importantly, a Guardian Right does not affect the landholder's title.
Guardianship offers equity holders clarity on how a single property can be divided into two and re-unified, detailing the associated costs, valuation of property portions, responsibilities of each party, and the significance of Call Options. This system provides society with a viable pathway to combat the escalating debt-based cost-of-living crisis.
Guardian Rights and Development Rights can be applied to existing houses and land, developing vacant land, uninsurable property, multi-dwelling properties, and derelict houses. These rights are protected by deed, unlocking new investment strategies and opportunities that can alleviate housing constraints and significantly boost housing supply.
What is a Guardian Right?
A 'Guardian Right' is an equitable interest specific to the 'bundle of fixtures' of a Property, holding a fixed value depreciating @ 10% per annum calculated monthly.
The bundle of fixtures, existing or not, will include: the house, shedding, pool, driveway, and fencing etc.
A Guardian Right carries 4 restrictions.
01
It is to be predominantly or exclusively occupied by the Guardian.
02
It holds a fixed value reducing by 10% per annum calculated monthly on the 1st day of each month.
03
It has a recurring Call Option where the landholder has an option to buy it once every 10-years.
04
And the repairs and maintenance of the residence, outbuildings, fencing, roading, gardens, trees and water rates are the responsibility of the Guardian.
The System
Guardianship provides with clarity what either Share of the property entails, where the Value stems, how the Right is future valued, what the responsibilities are and how the property shares can be reunited, and the agreement terminated. Guardians hold responsibility for the properties repairs and maintenance which includes the residence, outbuildings, fencing, roading, services, gardens, trees and water rates, while the Landholder is solely responsible for the land rates, government charges and contractual agreements over his holding.
Guardianships equitable interest model, breaks away from leasing or leasehold type tenancies and land trusts where complicated rules and regulations have prevented owners from fairness and recompence and further empower the landlord. Guardianship removes all secondary parties and the challenges of rent related matters, Guardians and landholders act respectively of one another, buy and sell at any time without permission, and only come together when a Call Option is due.
Fixed prices provides surety for landholders, guardians and investors where occupancy costs, equity gains and equity losses can be predetemined, and this can be tested against market rent to eliminate investor risk when determining what interest rate he can charge. The transfer of responsibility from the landholder to the guardian over the fixtures is another plus plus for both parties.
A Development Right over vacant land or derelict houses provide an equity gain for the landholder, but the guardian should do the numbers on an equity build over these types of property compared against a market rent cost for comparisom. Borrowing 300k over 10 years for example, the cost of a new home, and being paid 120k when you leave does have its advantages. Uninsurable houses are also provided new life using the Guardianship system, where investment can replace insurance in certain circumstances.
Treat a Guardian Right like a new car knowing fully that the value of it goes down and always has a fixed value in the end. Do this, and you will find that freeing youself from tenancy rules makes the repsonsibility of owning a Guardian Right definately worth it.
Rules and Regs
The Guardian Right value stems from the CIV (capital improved value) of a Rates notice, which can be increased through a Registered Valuation if required prior to entering this system.
To split 1 property into 2, a GRR Set-Up form is required along with a rates notice and valuation which must be signed and witnessed by a JP or solicitor to authenticate ownership of the property and the proof of the Value of the equitable interest being created.
Once this value is approved and set by the Registry, a Deed of Right is created for the owner and the value of the Guardian Right begins to depreciate by 10% per annum calculated monthly. This creates a reducing fixed value for every Guardian Right exchange.
Vacating Guardians may sell their Guardian Right at any time for the fixed price based on the depreciation schedule, and under a Call Option, the landholder is required to give no less than 3-months' notice if they wish to purchase the right through the Options Agreement. Vacant possession is to be given.
Investors are guided to use a fixed interest for the entire term, use straight-line loan calculations which reduce the principal evenly over the yearly term, and use a 50-week year and a 10 year (500 week) maximum term, (set by the closing option date) to protect borrowers and lenders with transparency. Borrowers and Lenders should use debt-based market rent as the upper limit for repayments, to reduce risk so as to protect the investment should the Guardian be unable to pay.
Comparison - Renting v Guardianship
Residential tenancies usually run in 6-month blocks to 1 year, and guardianship uses a 10-year block default but can be longer initially. This means that market rents can be raised 10-20 times within this period, but guardianship investment is fixed for the entire period staying at the price it began at.
The most glaring difference is that guardian repayments using a 50-week year and a 10-year maximum term fixes repayments for 9.5 years with the next 6 months free, and this is in direct contrast to having 20 market rent increases, or 10 if the new rules have kicked in, but are likely to be at least double the weekly cost of guardianship and there are no times when renting is free.
Further comparisons can show that Derelict houses and Uninsurable Properties can be brought back online using investment through a Development Right, where new owners pay to fix them up and live in them until the call option holder chooses to take back the property or leave you in it, and this provides the Guardian with a cheaper alternative than renting, while increasing the property value for the landholder.
Opportunities to ditch insurance for investment money in flood zones, can effectively remove the huge premiums and claim arguments, and get residents back on their feet straight away, while the other may take years if you can get back at all.
Vacant residential land can use a Development Right creating a partnership between Guardian and landholder, where the guardian pays to build the new house rather than the landowner, which benefits the Guardian and landholder considerably. Even granny flats or tiny homes could benefit through this method.
With so much global uncertainty and the anticipated fall in the bond market, housing and shares, the introduction of Property Guardianship can give investors a new understanding of how to better mitigate risk by stepping away from debt-based markets for a time while also protecting our fellow countrymen.