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Old 08-23-2012, 02:47 PM
 
680 posts, read 1,916,383 times
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Quote:
Originally Posted by Suncc49 View Post
As a former public accountant I can tell you that an arms length transaction involves a familial relationship or close personal tie to an individual.

This is definitely not arms length and the LL is way off base in interpretation.
Ummm... you have "reversed" the terminology here.... Hopefully you didn't do that with any of your client's taxes :P

An arm's length transaction is one that does NOT involve a close relationship/familial tie.
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Old 08-25-2012, 07:22 AM
 
Location: Baltimore
1,759 posts, read 5,125,941 times
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Maybe that is why they are a former public accountant
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Old 08-30-2012, 07:39 AM
 
Location: Gilbert - Val Vista Lakes
6,069 posts, read 14,748,634 times
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Here is a typical arms length transaction clause:

  • “Whereas, all parties relevant to this transaction are hereby indicating to XYZ Mortgage Corporation that
  • no party to this contract is a family member or business associate or shares a business interest with the mortgagor(s) or mortgagee.
  • It is further stipulated there are no “hidden terms” or “special understandings” between the seller(s), buyer(s) or their agent(s) in order to entice, induce or otherwise defraud the seller’s mortgagee in this transaction.
  • This purchase contract is not assignable.
  • If the purchaser intends on performing a simultaneous closing (aka flip) such a transaction can take place only if the re-conveyance is of equal or lesser value as to the current sales price indicated in this transaction.
  • The Buyer(s) & Seller(s) nor their Agent(s) listed below have any agreements (written or implied) that will allow the Seller(s) to remain in their property as renters or to regain ownership of said property after the successful execution of this short sale transaction.”
Perhaps the seller things that "business associates" or "shares a business interest with the mortgagor(s) or mortgagee", can apply to a tenant.

Ask the seller if you pay to get an attorneys opinion stating that a tenant (who is non-related and is not otherwise a "business associate", nor shares a business interest with the owner (mortgagor) is at arms length, will he sell the home to him.

The sellers agent may be able to get that clarification from the sellers lender.

In my layperson's opinion, the tenant is not a business associate and shares no business interest with him, except that of a landlord/tenant relationship, which would be disclosed in writing to the bank.
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