- Joined
- Aug 22, 2007
- Messages
- 304
The question of how you deal with this situation depends on how you look at it and what will get you what you are trying to achieve.
CMHC/lenders suggest the best way to do it is to put all the $$$ an account where you hold $$$ in trust for the tenant buyer. That works very well for CMHC/lender who are trying to see the history of monthly option payments. What`s better than a nice series of bank stmts showing the payments? If thats the only thing they will accept, then , that`s the way you have to do it.
On the other hand, maybe they will accept :
a. getting rent and option payments in separate cheques, photocopies of the option payment cheques and maybe representative copies of your stmts., or
b. getting rent and option payments in one cheque where you write on the bottom of the cheque something like, " $1200 for rent, $400 for option pmt."
c. letter from you , or better yet a statutory declaration from you stating what the rent is , option payments and how much you have collected.
The trouble is in nailing down what will be accepted in the future in order to put it in place now and in the face of us knowing that what was policy today or when you asked the question is not necessarlily what will be policy when your tenant buyer exercises the option and goes to get a mortgage.
Next, and from your perspective , the option $$$ is yours as soon as its paid to you whether tenant/buyer exercises option or not. Yeah, CMHC/lender like it better if $$$ stays in bank account but how do you like that ? Again, if the bank account is the only way it will work, then , thats the way it has to be but if one of the other methods work, use that. I don`t think the money in the account method is gospel or immutable . If you think the same , then , pick one of the other methods that you think will let you show CMHC/lender that $$$ and how much $$$ has been paid.
Think also about how you prove to them that the rent paid or portion allocated to rent was market rent. Not sure what the answer to this one is. Copies of adverts from other landlords at the time of signing the lease to own, or maybe CMHC maintains a data base that they can refer to.
cheers
Barry
CMHC/lenders suggest the best way to do it is to put all the $$$ an account where you hold $$$ in trust for the tenant buyer. That works very well for CMHC/lender who are trying to see the history of monthly option payments. What`s better than a nice series of bank stmts showing the payments? If thats the only thing they will accept, then , that`s the way you have to do it.
On the other hand, maybe they will accept :
a. getting rent and option payments in separate cheques, photocopies of the option payment cheques and maybe representative copies of your stmts., or
b. getting rent and option payments in one cheque where you write on the bottom of the cheque something like, " $1200 for rent, $400 for option pmt."
c. letter from you , or better yet a statutory declaration from you stating what the rent is , option payments and how much you have collected.
The trouble is in nailing down what will be accepted in the future in order to put it in place now and in the face of us knowing that what was policy today or when you asked the question is not necessarlily what will be policy when your tenant buyer exercises the option and goes to get a mortgage.
Next, and from your perspective , the option $$$ is yours as soon as its paid to you whether tenant/buyer exercises option or not. Yeah, CMHC/lender like it better if $$$ stays in bank account but how do you like that ? Again, if the bank account is the only way it will work, then , thats the way it has to be but if one of the other methods work, use that. I don`t think the money in the account method is gospel or immutable . If you think the same , then , pick one of the other methods that you think will let you show CMHC/lender that $$$ and how much $$$ has been paid.
Think also about how you prove to them that the rent paid or portion allocated to rent was market rent. Not sure what the answer to this one is. Copies of adverts from other landlords at the time of signing the lease to own, or maybe CMHC maintains a data base that they can refer to.
cheers
Barry
