Some borrowers gripe that it is difficult to get funds from escrow/reserve accounts for a CMBS conduit loan. With simple planning, reimbursements from CMBS loan servicers can be painless. It is important to know the ground rules before you start the work that is eligible for reimbursement. Here is the wrong way to do it – pay the contractor with cash or credit card. And the right way to do it – pay the contractor with a check.
Why? Most servicer reimbursements require evidence of payment for reimbursement. The simplest evidence is a copy of the front and back of the cancelled check. So, if you are planning to complete work eligible for reimbursement, remember to gather the copies of the canceled checks as you proceed. With most banks today providing images of the front and back of checks online, collecting the check information is easy.
The other documents required to receive a reimbursement include completing a simple draw request form, an invoice from the contractor marked “paid,” a copy of the work contract (if applicable) and an officer’s certificate stating the work has been completed in a good and workman like manner. The form of officer’s certificate can be found in the Loan Agreement.