Rental Property Investor | Realtor · Jacksonville FL | Savannah Ga |Raleigh NC · Member since 2017 · 467 posts · 161 votes
in this transaction, my assignment of contract and original purchase/sale contract is already signed off by end-buyer, deposit is made by end-buyer, and closing set.
Seller asked, after the fact, if can stay 14 days free after closing. i asked end buyer, he verbally said ok, and he also offered monthly lease-back at fair rate to seller. Seller asked for addendum to contract stating that extention, and asked if i (assignor) and end-buyer sign.
Q. is a better solution, that buyer and seller sign a lease agreement stating 2 weeks free to stay after closing? And a month-to-month agreement set up to default after that? (Q if separate agreement or addendum to original is used, is assignor (me) even involved or needed to sign anything at this point, as end-buyer already has assigned contract agreement of seller.)
any experienced, or settlement company, please chime in, in this supposed common scenario, thanks
China, ME · Member since 2014 · 3k+ posts · 4k+ votes
7y
@Matt Berklacy I've seen these arrangements go VERY wrong when the seller refuses to leave on schedule.
The buyer should execute a use and occupancy agreement, allowing the seller to stay for a specified number of days, at a fixed price per day for that period of time. It should specify that if the property is not vacant and broom clean by 7:00 AM on the next day, the per diem rate skyrockets to something like 10X. Make it hurt to stay beyond the agreed number of days.
Further, the buyer should hold back enough funds at closing to cover the per diem and to cover a hostile, contested eviction and a cleanout. Around here, I suggest $10K, but MA is a very tenant-friendly state.
Real Estate Broker · Hyde Park Tampa, FL · Member since 2019 · 2k+ posts · 3k+ votes
7y
The seller would need to present a post occupancy agreement to the buyer for execution prior to closing. It would be handled outside of the sales transactions and an agreement between the two parties. I've never encountered a "free stay" - as let's face it, someone is footing the bill for utilities, mortgage, insurance. But I prefer to leave these matters between the two parties and stay out of it. Hope this helps...
China, ME · Member since 2014 · 3k+ posts · 4k+ votes
7y
@Matt Berklacy I've seen these arrangements go VERY wrong when the seller refuses to leave on schedule.
The buyer should execute a use and occupancy agreement, allowing the seller to stay for a specified number of days, at a fixed price per day for that period of time. It should specify that if the property is not vacant and broom clean by 7:00 AM on the next day, the per diem rate skyrockets to something like 10X. Make it hurt to stay beyond the agreed number of days.
Further, the buyer should hold back enough funds at closing to cover the per diem and to cover a hostile, contested eviction and a cleanout. Around here, I suggest $10K, but MA is a very tenant-friendly state.
@Matt Berklacy Not sure why the buyer would let the seller stay for free, change the closing date instead. Otherwise, the seller should be paying rent and the buyer needs to hold back a signficant amount of money in case the seller refuses to leave.
Real Estate Agent · Las Vegas, NV · Member since 2015 · 2k+ posts · 1k+ votes
7y
I recently had to do this to close a deal The seller needed 30 days to stay. I made it part of the purchase agreement and held a hefty deposit in escrow. they moved out without incident. I was not worried about damages because I am renovating the home and I knew how poorly they kept the place. Obviously I would like to avoid these situations . Also tenancy in Nevada is pretty landlord friendly and in less than 21 days you can have someone removed .
Rental Property Investor | Realtor · Jacksonville FL | Savannah Ga |Raleigh NC · Member since 2017 · 467 posts · 161 votes
7y
From a learning perspective and I am concluding,
1. a simple addendum to an existing purchase/sale contract saying seller can stay x days post closing, etc,etc, does not suffice at all...
2. a best option is to move closing back,
3. and a last option is to create a "lease agreement" or "post occupancy possession agreement", I assume same thing. that needs to be written with strong terms of protection, and it is handled completely separate from the closing transaction.