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.