Having some problems starting a limited partnership. CMHC wants the investors to sign for more liability then just there initial investment. My lawyer doesn`t understand where the problem exists with CMHC. Has anyone else had these issues and how were they handled?
Having problems starting a limited partnership
- Thread starter DeniseT
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Yes. It happens all the time. If the property is in a company name personal guarantees are required. This is just one of the many reasons to hold property in your own name if possible.
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QUOTE (DeniseT @ Dec 23 2009, 12:28 PM) Having some problems starting a limited partnership. CMHC wants the investors to sign for more liability then just there initial investment. My lawyer doesn`t understand where the problem exists with CMHC. Has anyone else had these issues and how were they handled?
why is this a big problem? just sign then. the corp will be on title and you on mortgage. assuming you prefer doing it under a corp, isn`t it still better than you being on both title and mortgage?
why is this a big problem? just sign then. the corp will be on title and you on mortgage. assuming you prefer doing it under a corp, isn`t it still better than you being on both title and mortgage?
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QUOTE (DeniseT @ Dec 23 2009, 11:28 AM) Having some problems starting a limited partnership. CMHC wants the investors to sign for more liability then just there initial investment. My lawyer doesn`t understand where the problem exists with CMHC. Has anyone else had these issues and how were they handled?
we do LPs all the time .. banks requires a certain minimum networth by the GP shareholders .. so this might be insufficient in this case.
usually 25% of the mortgage is the minimum networth requirement by GP shareholders.
If a limited partner signs a personal guarantee he is by definition not a "limited" partner anymore as his liability potentially exceeds the investment amount !
Who, besides you, owns the GP ?
is your stated networth 25% or more of the mortgage ?
we do LPs all the time .. banks requires a certain minimum networth by the GP shareholders .. so this might be insufficient in this case.
usually 25% of the mortgage is the minimum networth requirement by GP shareholders.
If a limited partner signs a personal guarantee he is by definition not a "limited" partner anymore as his liability potentially exceeds the investment amount !
Who, besides you, owns the GP ?
is your stated networth 25% or more of the mortgage ?