Can I rent from the person that is buying my house?

[Yadira Gutierrez]

Hello BP Community,

I am in a little bit of a dilemma, looking for advice from the ones that know better...

Here is my situation:

My house is up for closing the second  week of July.

I have been wanting to buy a HUD house. Unfortunately, I haven't found a registered broker that I can count on.

I haven't  found anything on the regular market either.

I desperately started looking for short term rentals. They are way too expensive. 

I looked into rental communities, which are expensive as well and also requires 12 month lease. I would not like to spend my money on rent and make a long term commitment  when I want to buy as soon as possible.

The family that is buying my house told me that I can stay after closing if I need to. They are in no rush. However, I have been warned of some legal issues. Additionally, I need the money to be able to buy another property.

Question: Can I make my rental legal with the new owners, so we are both legally safe? Like a month to month lease... starting the day of the closing?

Looking forward to hear from you.

Thanks!

Yadira

[Jeff Rabinowitz]

If I were the buyer I would be quite amenable to your situation but I would protect myself. I might ask that some of the proceeds of the sale be held in escrow to provide a security deposit and specify that the house be left in broom clean condition and that you were responsible for any damage that occurred during your tenancy. If you expected to remain in the house for longer than a month I would want a clause specifying that the escrow agent would release funds periodically (perhaps at the beginning of each month.) I would expect the first month rent to be paid out of your funds at closing. I would want a definite end to the lease and a significant increase in the rent if you exceeded that term. I would specify that the utilities remained in your name and that you were responsible for them.

You might be able to negotiate a reasonable daily rate with few conditions and low or no escrow requirements with an inexperienced buyer.