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Do you need a post-occupancy agreement when buying a home?

| Sep 25, 2021 | Residential Real Estate |

Post-Occupancy agreements, sometimes called post-settlement occupancy agreements or even rent-back agreements, play an important role in some residential real estate transactions. Your date of occupancy is technically the date when you, as the buyer of a piece of real estate, have the right to move into that property. 

Usually, the seller will have already moved out by that point, but sometimes, complications arise. They might know ahead of time that they have to stay in the property a little longer than usual because they have to move for their job. Other times, the issue might be unpredictable, like purchasing their new home falling through after you already closed on the property. 

Having a post-occupancy agreement in place before you take possession of the home will protect you as a buyer in this kind of scenario.

What does a post-occupancy agreement actually do?

If the seller will remain in the property after the date that you should take possession, you want to have a post-occupancy agreement with them. That agreement creates certain terms on their stay in the property. It is essentially a rental agreement that protects you from liability and damages to the residence.

For example, it is common for buyers to assess a daily charge for the right to stay in the property. They may also require certain other concessions from the seller. Without an agreement in place, you may have to actively evict the seller if they don’t leave when they should. Additionally, you may have to sue them to recoup the losses you incur when you cannot take possession of your new home. 

Identifying possible issues that could arise while buying or selling residential real estate can help you protect yourself legally and financially.