This can only happen on commercial property, not residential (1-4 unit properties). Most commercial lenders have covenenants in their loan docs that require you to submit financials, rent rolls, etc., annually on the borrowers, guarantors and collateral, if things look bad, it could constitute a default. If anyone ever read every line in a set of commercial real estate loan documents, it would scare them, but institutional lenders wouldn’t make commercial loans without those assurances. If you want to avoid those kinds of loan covenants, you have to use a private or hard money lender.
