You will "own" the "right to buy at some future date", but not the property itself until you exercise the option.The other possibility is that he actually has had title convey to his name.

Lenders may exercise their right to call the loan due if title changes without their permission.  

If non judicial, the bank exercises the due on sale clause of the note and files notice of intent to foreclose, with the delinquent amount due to reinstate, if the borrower does not cure the default.

@Suvir Salins    exercise caution just become these homes are the price of stamp duty in your country does not make them good investments.I used to post of the property investors forum in your country.. and I met the Dingo there 6 years ago. he has done a nice job ... be very very careful.. 

The option agreement would also say that an additional $300 will be collected and applied to the down payment, should the tenant decide to exercise their option.

I think that forming a C-Corp, and going through this exercise is very good for your lawyer, your CPA, and possibly your financial planner.Here are a bunch of reasons why this approach is unlikely to benefit you: 1) Sounds like there isn't much to protect here - that this is a single property that will be financed.

Correct my kids less and not make a big deal over small things. in all reality, going back in time machines has proven to be an exercise in imagination.

My tenant had the first right of refusal on the property, but decided not to exercise.

I recommend you use an attorney to help you navigate that decision.There's also the option of exercising patience, a virtue so often forgotten in today's world of investors.

Assuming they do so within the next 2 weeks, we're inclined to let them keep operating under the existing mortgage and not exercise the due on sale clause.