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My interpretation of the rules are, you and the landlord are obligated to "mitigate damages" (~1:20 in video), meaning to minimize lost rental revenue. If you bail out without helping finding a replacement, you are not meeting your duty to mitigate. The landlord still has to make a concerted effort to find a replacement and if ever taken to court (by you) would have to prove that s/he was actively advertising and showing the property. Meanwhile, you are responsible for any of the landlord's lost revenue until the tenancy (contract) ends (~4:00). So if it takes two months for the landlord find a new tenant and for them to move in and start paying rent, and the new tenancy rate is $100 less per month then you were paying, then you are responsible for two month's full rent while vacant, plus $100 X the number of remaining months that you bailed out early. The landlord gets to make exactly the same revenue s/he would have made had you not bailed out on (broken) your contract, and could make a claim in court on you for those losses. As mentioned in the video, talk to your provincial landlord tenancy advisory board and review their companion Landlord Tenant handbooks and understand the contract that you are in. That you had a family emergency is regrettable, but it does not and should not become the landlord's financial problem. Landlords have bills to pay just like everyone else, and when there is no rent to cover their mortgage and property tax expenses, that can put them in a scramble. Hope that helps.

Land development goes through three linear phases. 1) Vacant land acquisition, followed by 2) zoning change approval (12-18 months), followed by 3) site plan approval (12-18 months), which then begins construction draw financing. - There is significant value lift at the success of the zoning change, and at the point of site plan approval, which can be "exits" for the land developer (ie. sell your project). - for projects with site plan approval, construction financing from institutional lenders is plentiful to 80% loan to value and lots of competition. - for raw land acquisition, 50% LTV from institutional investors and private capital up to 65% LTV. It all depends on what is getting developed. - key to developing land Is to learn from your local planning commission what is "the highest and best use for the land" then set out to get the project rezoned and a site plan approved. - "mezzanine financing" is sometimes used to fund the soft costs that are related to zoning and site plan approvals. - Expertise can be found by borrowers by searching the internet for "Land Development Consultants"

@@RichardsMortgageGroup Thanks for the information!

Generally, the penalty is the greater of 3 months interest or the positive interest rate differential, so yes, 3 months interest likely applies in your example.

Rent-to-own is a bet a tenant makes that before their contract expires that they can mortgage qualify, plain and simple. Many things can and do go wrong, some within the tenant's control and some outside their control, which is why I say Rent Until You Can Own to eliminate the bet/risk. Questions for you: Are you in the business of arranging RTO for profit? Are you licensed to trade in real estate? Where would one find an independent reference to the "90% success rate" you quote?

@@RichardsMortgageGroup Hi Chris, I am now looking into becoming an RTO provider, as a business. Yes, it's for profit. You have your brokerage business running for profit, as well - nothing wrong with that. From my point of view, the RTO agreement is not a bet - it's an agreement, based on the best knowledge of both parties involved: the tenant buyer, and the seller. And, above all, it is overseen by a lawyer. My intention is not to start a debate here; but your video instills fear based on poor communication situations - and this poor communication can be easily avoided. There are companies in Canada that have such a high rate of success - because they are creating win-win RTO situations (win for the buyers, win for the sellers). And the 90% reference is public information, you can look it up. There are scammers, for sure - as in any other field. They are not part of this talk and everyone needs to do their own due diligence. You just cannot generalize and call everyone a scammer. In the business model that I am now building, the tenant / buyers will be accounted for the steps they make towards repairing their credit. They will be encouraged to make progress, under the supervision of a credit repair specialist. Nothing is left to chance - because they need to be, and will be successful in their dream to buy their property.

@@chirileo theoretically you are correct, in the *best* case and with clear communication it can be win-win and my web page on the topic says exactly that and explains the concept well including how to do it safely. And there are legitimate businesses with good intentions out there. Unfortunately, there are plenty of bad actors too and old habits die hard, and the reason I made the video we are talking about is that I got tired of getting calls for what I call Rent-to-Own-Rescue. The biggest bet a tenant/buyer makes (especially with 'deemed appreciation' baked in) is that house prices always go up and that they will appraise when the time comes. It is very important that a T/B have an educated and independent view on the direction of house prices if they want to make this bet. If you are not sure, keep your money in your own bank account, not your landlord's. You can (and must) still work on credit repair, employment stabilization, debt reduction, and forced savings if you ever want to get a mortgage. Simple. More info here: www.richardsmortgagegroup.ca/can-i-get-a-mortgage-canada

@@RichardsMortgageGroup There is a big advantage to the "classic" RTO that nobody can ignore. - Sooner or later, the tenant/buyers will move into a home. Whether it's sooner or later, they will need to work on the credit repair. - Sooner is better. The housing market is going up, and if they rent only, while saving for the down payment separately - they may not be able to keep up with the current market. - If they move in, they will be already living in the home they want, and with the extra payments they make (the lease option payments), they will have the down payment saved easier. - With the classic RTO, they pay the rent at the market price (they would pay rent anyway) and the house value for the time the RTO contract ends (2, 3 or 5 years) is calculated following the current market trends. As you know, this could be a huge win for them. In some areas in Ontario, the houses doubled in value in 3-4 years. While nobody should count on such unexpected / unforeseen price increases, they work well for the tenants that are already moved in, and against the ones that only rent and try to save. - At the same time, yes, there is the risk that the market can go the opposite way. In this case, the RTO agreement may be extended, in hopes that the market can switch direction. Just a few points... and I will stop here. It comes down to everyone's due diligence; just like you say - the more the tenant / buyers educate themselves, and ask the difficult questions, the better for them. I enjoyed our talk, have a good day, Chris!

5 years later, mine is still squeal-free. Check out other comments as other people have solved with a nudge here and there or equally innovative solutions!

Frustration noted, and yes, developing vacant land with a home takes deep pockets because the *risk of cost overrun is significant*. I think that it is important to understand that mortgage lenders as a whole design their policies and guidelines to help both you and them avoid trouble and loss. It is hard for banks to survive for long if they don't lend money and its hard for banks to survive for long if they loose money! So risk is measured and managed. Hope this explanation helps.

@@RichardsMortgageGroup Thanks for the reply. I understand the reason behind the rules, but it still strikes me as a bad situation if we really ever want to address the housing shortage in our country. I'm not sure what the solution is, but maybe the govt. could incentvize new builds better. Maybe a program to help mitigate risk to lenders?

Depending on the land location in Canada (big place!), the maximum land loans available are typically 50% with some very specials cases where ~70% might be attainable. You come up with the rest as down payment, and yes, home equity (if you or family member already own) is one source of getting the cash. If your point is you wish that banks would lend you more money on vacant land (and they won't), then the strategy becomes buy an existing acreage already with a house that is easier to finance with a much smaller down payment. If properties with homes are too expensive in your area, then the strategy might become move to and get employment in an area with less expensive homes. Hope this clarification helps. I am simply a messenger and a guide to what-is and what-isn't! Cheers

Tiny homes, trailers, and other non-standard properties are for the most part non-financeable with a traditional mortgage. You may be able to finance up to 50% of the land value only, but typically most mortgage lenders stay away from anything with ongoing commercial agriculture as it changes the foreclosure rules.

I appreciate that!

Farm Credit Canada

You are so welcome!

There was a book referenced in the video made for landlords. My theme in the video is to avoid things you don't understand.