Bryan Artawijaya Susilo and his sister Patricia Mirawati Susilo operated a “rent to buy” scheme which matched sellers attracted by “no agent’s commission” to buyers attracted by vendor finance.

They devised the enterprise around taking options-to-buy from their sellers to create sales stock; and offered the stock to would-be buyers on an instalment basis.

Buyers’ instalments during the 12 month or more option period comprised principal and interest. If the option expired or was terminated, all payments were forfeited. When a buyer exercised an option, they had to take out a conventional loan to pay the balance due to the marketers and their sellers. In the meantime they occupied the home as tenant.

As for the sellers, the pair paid an upfront fee and instalments credited against the purchase price. They also secured a right to renew the option for further periods in their discretion.

By way of example, on one project they paid their sellers an option fee of $2100 per month with a right of immediate occupation. To their buyers, they charged an upfront option fee of $1000 and monthly instalments of $5,600 of which about $5k was allocated to reduction in the purchase price and $600 to rent.

The businesses operated in Perth under the names $700 houses.com and sellhouseseasy.com but neither of the innovative siblings held a real estate licence.

A typical add placed to find sellers with homes to place under option ran like this:

We’re part of a group of real estate investors who buy houses and units directly from you. We buy: Expired Listings, Vacant Houses, Ugly/Smelly Houses, Almost Finished Houses, Debt Ridden Houses We Buy Houses Australia Wide – Any Price, Any Condition! If you don’t want it, we do! We can buy your house fast. Agents can’t. We do not charge any commissions or fees to buy your house.

To find buyers, the ad ran:

WA $558 per week. OWN MY HOME! Must Sell. ‘STUFF THE BANKS! Move in today. No Banks Needed. $558 p.wk + outgoings.

Many of the representations were exaggerated and inflated: bank finance was ultimately needed; they did earn commissions or similar; they did not buy homes; for the sellers the transaction was anything but fast; and they were not part of a group of investors.

There was no suggestion of an outright scam of either buyers or sellers – the amounts due to sellers appear to have been paid – but the exorbitant advertising claims amounted to misleading and deceptive conduct for which the WA Department of Consumer Affairs too exception.

While there were many buyers and sellers apparently enticed by the concept; not many were enamoured by the detail and hence the numerous complaints.

The business recorded of only a modest $20,000 on their two projects.

Facing maximum penalties of $660k, the court imposed fines of $17,500 on Patricia and $12,000 on Bryan.

COMMISSIONER FOR CONSUMER PROTECTION -v- SUSILO [2014] WASC 50