I have taken Doug’s instalment sale contract in to my lawyer and had him look it over with reference to the laws here in Saskatchewan. He said that it would not work here, because the laws are such that a non-payment problem would require a foreclosure proceeding. (i.e. months and lots of cash).

What would be wrong with using a lease, and an option contract instead? From what I can see, using a lease contract in conjunction with an option contract would be a good way to go. Just thinking out loud here, so can anyone see a flaw in my logic?

Lease

1. Upside- the lease is under the jurisdiction of the tenant laws of your province. This would mean that a non-paying tenant would only take about 1 month to remove at maximum. It also provides a low cost proceeding to do the eviction (via the Office of the Rentalsman), and a way to get a court order to re-coup damages on the property if they (the non-paying tenant buyer) decide to trash the place.

Downside- you are under the jurisdiction of the applicable tenant laws in your province. The tenant can force you to fix things in the property for example

Option Contract

2. You could deal with the downside by adding a clause in the option, that all repairs done by you will be added to the final purchase price. (not perfect, but it would probably prevent the tenant from dragging you to a hearing to fix something in the first place)

It would spell out the essential terms of the deal including purchase price, amount of option payment how much of the rent payment would be allocated per month to the purchase price, length of the option (i.e. the term). You could also put in other terms like if they break the lease (i.e. stop paying you); they lose the option contract as well.

As far as I can tell, this would be the best way to avoid equitable interest problems, AND provide an easy, cheap way, to get deadbeats out of the property if the deal goes south. I see being under the landlord tenant rules as a positive thing in my favour, not something to be avoided at all costs.

I would be interested in all opinions on this one.