- Joined
- Oct 22, 2007
- Messages
- 1,191
LENDER’S CONDITION ALERT
Lender’s Condition HEADS UP
It has come to AREA’s attention that some lenders may be adding a lender’s condition for review and approval of condo docs by the “insurer” before they will finance the deal. This is coming to light at the “instructions to solicitor” stage and in spite of any independent condo document review that the client may have as a condition, this is an additional requirement.
Members need to be alert to this fact and assist their clients to structure their offers accordingly.
A best practice would be for your clients to receive, in writing, a letter from their lender stating clearly that there are no further lenders conditions before they waive conditions. We are aware that some deposits have been forfeited as a result of this “surprise” condition. At this time, we are not aware of this being a condition for non-insured deals but it likely is only a matter of time.
So to sum up:
1. Make sure you protect your client and make the financing condition read subject to financing and satisfaction of any/all lender’s conditions.
2. Do not allow your client to waive conditions until all conditions have been satisfied.
3. Ask for and receive a lenders full satisfaction of conditions letter before you allow your clients to waive conditions.
Lender’s Condition HEADS UP
It has come to AREA’s attention that some lenders may be adding a lender’s condition for review and approval of condo docs by the “insurer” before they will finance the deal. This is coming to light at the “instructions to solicitor” stage and in spite of any independent condo document review that the client may have as a condition, this is an additional requirement.
Members need to be alert to this fact and assist their clients to structure their offers accordingly.
A best practice would be for your clients to receive, in writing, a letter from their lender stating clearly that there are no further lenders conditions before they waive conditions. We are aware that some deposits have been forfeited as a result of this “surprise” condition. At this time, we are not aware of this being a condition for non-insured deals but it likely is only a matter of time.
So to sum up:
1. Make sure you protect your client and make the financing condition read subject to financing and satisfaction of any/all lender’s conditions.
2. Do not allow your client to waive conditions until all conditions have been satisfied.
3. Ask for and receive a lenders full satisfaction of conditions letter before you allow your clients to waive conditions.