How the Guardian Right System Works
The Guardian Right System uses a trust deed to separate property into two clearly defined interests: Landholder-Share A and Guardian Right-Share B. Share B holds the right to occupy and maintain the property, while Share A holds the land itself. The Guardian Right depreciates at a fixed 10% per year, and every agreement includes a call option with a known future price creating a simple, predictable, and transparent model that removes speculation and aligns incentives for everyone involved.
Key Components
- Landholder Share A: Represents ownership of the land itself.
- Guardian Right Share B: Represents the fixtures and grants the holder the right to occupy and maintain the property, but not the underlying land.
The Guardian Right depreciates at a fixed rate of 10% per year. Each agreement within the system includes a call option with a predetermined future price, eliminating speculation and providing a stable, predictable environment for all participants.
Beneficiary Mechanism and Market Control
The Guardian Right operates through a "beneficiary" mechanism, allowing the trading of property interests within a controlled market. This system is designed to benefit a broad range of stakeholders—referred to as "trustees"—which may include owners, lenders, developers, retirees, charities, and government entities.
Social Impact and System Objectives
A core objective of the Guardian Right System is to reduce housing costs, thereby addressing broader social issues. By introducing a new participant into the housing market—the guardian—the system seeks to resolve traditional tensions between renters and landlords. This approach aims to reshape investor behaviour, moving away from established financial models and encouraging outcomes that are more equitable and efficient.
Dualistic Approach in Property Arrangements
Australian Property Guardianship (APG) adopts a dualistic model, separating the house from the land and distinguishing use from title. This is comparable to the way a rates notice differentiates between land and capital improved value, recognising the individual elements within property ownership. APG uses a trustee-beneficiary relationship model, which differs fundamentally from traditional ownership structures. By clearly defining roles and responsibilities, the system allows guardian interests to stand apart from the conventional landlord and leaseholder arrangements.
Flexibility and Adaptability
The APG system provides guardians with significant flexibility regarding when, where, and to whom they may sell their interest. This contrasts with the more restrictive occupancy rules and fee structures found in Community Land Trusts (CLTs), Retirement Villages, and Eco-Villages. Additionally, APGs are not tied to a specific parcel of land, increasing the model’s adaptability and making it suitable for use throughout Australia.
Affordability and Financial Structure
The Capital Improved Value (CIV) or Guardian Right - typically accounts for approximately 25–50% of the total property value, making the Guardian Right a more affordable pathway to ownership. When financed, this interest generally requires a shorter-term loan aligned with the Guardian Right Call Option. Money lenders are encouraged to set market rent as the upper limit for repayments, thus reducing financial risk.
Terms, Responsibilities, and Protections
The Guardian Right Terms Agreement ensures a clear separation of responsibilities between landholders and guardians (as outlined in the Registry Rules). However, if there are existing mortgages that do not specifically identify the CIV as belonging to another party, these new terms become secondary. In such cases, landholders remain responsible for existing arrangements, and guardians can protect their interests by placing a caveat on the property. Under these terms, guardians may sell their interest to other guardians, and landholders may transact amongst themselves. When a call option is due, the guardian cannot prevent the current landholder from exercising their right.
Practical Applications and Benefits
APG offers families a way to safeguard their children, supports retirees wishing to downsize by enabling them to sell their homes while retaining land for capital growth, and provides opportunities for guardians to restore neglected or flood-affected properties, or to develop vacant land without needing to own the title. The system also enables developers to achieve higher profits and allows lenders to earn returns while supporting affordable housing.
Strategic Purpose and Transparency
Strategically, APG serves as a platform for innovative housing solutions, with each property’s purpose and intended outcomes clearly understood by the trustee at the time of registration. The original trustee’s intentions will be highlighted when call options become due, ensuring transparency and accountability within the system.
What is a Guardian Right?
Australian Property Guardianship (APG) uses an innovative housing system tool called a Guardian Right™ developed by EmpowerUs Australia Pty Ltd.
A 'Guardian Right' is an equitable interest in a property, created over the fixtures of the property by the landholder as trustee. The Guardian Right is also a depreciating Asset, holding a fixed reducing market value, and is reunited with the landholding through a sale.
A Guardian Right has 4 functions.
01
The Guardian Right interest is to be predominantly or exclusively occupied by the Guardian.
02
The Guardian Right value depreciates by 10% per annum calculated monthly on the 1st day of each month.
03
The Landholder holds a recurring Call Option to purchase the Guardian Right once every 10-years.
04
And the Guardian is responsible for the repairs and maintenance of the residence, outbuildings, fencing, roading, gardens, water rates and trees.
The System
The Guardian Right Terms Agreement clearly defines the roles and responsibilities of both the Guardian as beneficiary and the Landholder as trustee. The agreement provides structure and clarity regarding each parties ownership interest, the origin of the initial value, the method of future valuation, and the duties required to prevent any overlap or ambiguity between parties.
Guardians are tasked with the upkeep and maintenance of the property. This includes responsibilities for the residence itself, any outbuildings, fencing, roading, services, gardens, trees, and payment of the water rates. On the other hand, the Landholder is solely responsible for the land rates and taxes, government charges, and any contractual agreements that pertain to the property holding.
While dual ownership arrangements exist elsewhere, APG is distinctive. It bears similarities to native leasehold tenancies, but stands apart because the trustee beneficiary relationship bound to a form of trust deed which replaces traditional rental arrangements with a depreciation schedule.
Guardianship positions itself between Property Owners and Renters, representing both a form of ownership and a form of tenancy. This hybrid model opens up a new segment in the property market, offering both flexible and fixed options. It also provides greater price certainty for landholders, cost effective occupancy for guardians, and reduced risk lendering options.
Guardianship eliminates the need for reverse mortgages to access home equity, and it avoids the complexities of rent to buy arrangements, which require two separate contracts and result in higher than market rents as well as upfront deposits. APG simplifies government schemes and approved management services. Furthermore, it challenges superannuation rules for funds to buy land in the name of the super company, while occupants own the use under a different entity.
For those seeking to provide affordable housing in urban areas where services are already established, new tower developments designed primarily for guardians can address both developer cost recovery needs, and owner affordability requirements. This approach can deliver exactly what society needs in terms of certainty and accessibility and increase developer profits.
Arguments that show the Guardian Right as a way to pay for an occupancy in advance is both correct and incorrect as this does not address the residual value realized when the occupant sells the property. Before entering our marketplace, try the Call Option Calculator to reveal advanced prices, serving as both a warning and a guarantee for lenders, guardians, and landholders. APG is a truly transparent system designed to ensure that all actions are visible and nothing is concealed by mere promises or words.
Guardian Right Valuation, Depreciation, and Transaction Process
Establishing Guardian Right Value
The initial value of a Guardian Right is determined using the property's rates notice, which provides separate details for the Land and Capital Improved Value (CIV). Property owners may opt to increase these values by submitting a registered valuation prior to forming a trustee-beneficiary relationship. When registering a property, ownership and valuations must be authenticated by a Justice of the Peace (JP) or solicitor. This authentication forms an essential part of the Guardian Right and Guardian Right Call Option documentation, serving as a future reference point.
Depreciation of Guardian Right Value
After values are established and the property is registered, the CIV portion associated with the Guardian Right depreciates at a rate of 10% per annum. This depreciation is calculated monthly, on the 1st day of each month, resulting in a steadily decreasing fixed value for every Guardian Right exchange.
Guardian Right Sale and Call Option Procedure
Guardians may sell their Guardian Right at any time, for the fixed price determined by the depreciation schedule. If a Landholder wishes to exercise a Call Option, they must provide no less than three months’ notice using the registry’s call option process, as specified in the Guardian Right Terms Agreement. Vacant possession is given at the time of sale. The registry system issues automated notifications to landholders at six months, then at five and four months prior to the decision deadline, ensuring timely reminders of their upcoming choice.
Lender Guidelines and Repayment Structure
Lenders are encouraged to use straight-line-reducing loan calculations, which evenly decrease the principal over the loan term. These calculations are based on a 50-week year and allow a maximum term of 500 weeks, streamlining repayments and ensuring loans are repaid within the Call Option period. Interest rates should remain fixed for the full term to protect both borrowers and lenders, enhancing transparency. Under the Guardian Right Terms Agreement, lenders may allow Guardians to sell the property with the remaining debt attached, offering benefits to both lenders and new Guardians and promoting flexibility within the financial system.
Lender Protection and Market Rent Comparison
Lender protection is reinforced by using market rent comparisons to set an upper limit for repayments. This reduces investment risk by ensuring that Guardians are not burdened with unaffordable repayment costs. As outside market rents increase, the fixed repayment for a Guardian lender mortgage is likely to be lower than actual market rent, which can create demand among new Guardians seeking to take up the opportunity.
In Comparison
Ownership Perspective
Consider a property with a market value of $750,000, a debt of $300,000, and a rates notice showing $450,000 for land and $300,000 for capital improved value. Market rent for the property is set at $700 per week, which results in a gross return of 4%. Usual costs associated with ownership include principal and interest repayments, repairs and maintenance, management fees, insurance, land rates, and water rates.
Assuming a conservative scenario, the property’s value increases to $1.2 million over the next 10 years. According to a loan calculator, if the owner is early into a 30-year loan, around $70,000 of the principal may be paid off in 10 years, or $100,000 if they are further into the loan term. Insurance, repairs, and management costs are expected to rise with time, necessitating either an increase in rent or negative gearing from wages to cover these expenses.
Alternatively, selling the Guardian Right and using the proceeds to clear the $300,000 debt allows most costs, except land rates, to be passed on. This scenario presents a more favourable outcome for the owner. The call option must also be considered: upon maturity, the owner can exercise the $300,000 Guardian Right for $104,000, or wait for the next option at $36,000. Under these assumptions, APG demonstrates a minimum $126,000 advantage over the traditional rental model.
Though the Rich Dad Poor Dad series may appear dated, its distinction between these two systems still highlights the difference between freedom and stability. A freedom mindset is characterised by a preference to live without debt, while a stability mindset accepts working for a wage and gradually paying off liabilities. Regardless of the chosen approach, the property’s gain from $750,000 to $1.2 million remains unaffected.
Occupant Perspective
Tenancy agreements are typically established in six-month increments, which enables landlords to regularly review and increase rent. In the scenario above, the tenant pays $700 per week—often more than they can afford—and is prohibited from subletting to anyone not named on the lease. In addition to concerns about job security and regular inspections, tenants face the prospects of rent reviews, potential rent increases, bond top-ups, limited savings, and the risk of eviction and related moving costs.
Financial difficulties commonly prevent tenants from purchasing property through conventional means, although they may qualify for car or personal loans. Guardian Right equity is also considered a form of personal loan. In the context provided, the tenant is unlikely to afford a $300,000 loan over 10 years unless the interest rate is zero, though subletting rooms could assist in meeting repayments, albeit with significant difficulty.
Instead, the tenant could seek a Guardian Right valued at approximately $240,000 over 10 years, where a $700 per week payment, without a deposit, would suffice. After 10 years, the Guardian Right would retain a value of $83,000, providing a compelling incentive to transition from insecure renting to the greater stability and predictability of guardianship.
A Change of Mindset
Guardianship helps to mitigate volatility within the housing market, reducing risks for landholders, lenders, and guardians alike. With loan values approximately half those of standard arrangements, landholders continue to benefit from capital gains, guardians secure stable occupancy and receive compensation upon departure, and lenders are assured of ongoing tenancy. APG’s structure—where values decrease rather than rents increase—appropriately allocates responsibilities and delivers solutions that society needs.
The end user, now responsible for the property, can rent out rooms during difficult periods and directly address maintenance concerns, eliminating common landlord–tenant disputes and improving community standards. Guardianship offers flexible financial solutions for titleholders, guardians, and families assisting their children with deposits, keeping debts manageable for all involved. This approach supports everyone facing increasing living costs, often exacerbated by bureaucratic processes.
Guardians are not given a hand up here--helping themselves to restore their own family pride which has far reaching impacts in schools (helping to prevent schoolyard bullying) and society (ending transiency and homelessness), but also as a prevention against crime and vandalism, family violence and child abuse, common in those who are made to feel less than, and have no pathways forward. Guardianship is not the grail, but it sure helps those less fortunate with an avenue of honour.
Ultimately, both ownership and guardianship options are now available. Individuals have the choice to rent a home or purchase a home outright, negative gear a landholding, buy a Guardian Right as a stable tenure for a time, or do up an old home or build a new one without owning the title. The choices are yours.
Disclaimer: EmpowerUs Australia is not a financial or legal institution. The information provided on this website is designed to inform current and future clients about the inner workings and outer applications of the APG system to the best of our ability.