ASIC Regulatory Guide 203 mentions;
“In relation to the provision of credit, the National Credit Code applies to credit contracts where, among other matters: the credit provider provides the credit in the course of a business of providing credit ….” and
“In relation to credit assistance and intermediaries, the National Credit Act states that a provider of credit assistance or an intermediary comes within the scope of the Act if the relevant credit activity occurs:
… in the course of, as part of, or incidentally to, a business carried on ….”
In the past I thought that if I only conducted two or three Instalment Contracts or Second Mortgages each year, then I would not be seen as providing these credit activities “in the course of a business”.
The “in the course of a business” question has been addressed by ASIC. Regulatory Guide 203 also mentions;
“We have published guidance about this in Regulatory Guide 121 Doing financial services business in Australia (RG 121) at RG 121.41–RG 121.50. This guidance may be useful for deciding whether you are carrying on a business in Australia for the purposes of the National Credit Act.”
Regulatory Guide 121.42 (g) says;
“You will not be deemed to be carrying on a business in Australia merely because, … you:
conduct an isolated transaction that is completed within 31 days, not being one of a number of similar transactions repeated from time to time;”
Obviously an Instalment Contact and/or a Second Mortgage is longer than 31 days. Also, two or three Instalment Contracts or Second Mortgages per year is a number of similar transactions repeated from time to time.
As a personal opinion, I believe the courts will always uphold your right as an individual to sell your property with Vendor Finance without the need for you to hold an ACL. However, after you do that once, it will be interesting to see if the courts regard further transactions as “similar transactions repeated from time to time”.