Linda Goodspeed for The Patriot Ledger, June 29th, 2012
Question: My daughter and son-in-law have made a down payment on a new home. They want to move into the home before school starts in September and scheduled a closing date for mid-July. The sellers have asked them if they can stay a few weeks after the closing. My daughter and son-in-law are inclined to let the sellers stay until August 15th. I don’t think this a good idea. I was wondering what you think.
Answer: I’m with you. I think allowing sellers to stay in the home after closing should be avoided if at all possible. The situation creates a landlord/tenant arrangement that can be fraught with peril.
What if the seller does not move out by the specified date of August 15th? Your daughter and son-ion-law would then be faced with the costly and time-consuming prospect of having to evict them. What if the seller damages the home post-closing? What if someone gets hurt visiting the property post-closing?
Sometimes, there are circumstances that make a post-closing occupancy by a seller unavoidable. More often, however, it is just a matter of convenience for the seller.
If staying past closing is truly unavoidable on the part of the seller, then your daughter and son-in-law should make full disclosure of the arrangement to any lenders involved in the transaction.
They should also have their lawyer draw up a clear and detailed post-occupancy agreement. The agreement should cover, among other things, rent and length of time of the occupancy, move out date., etc. Your daughter and her husband should also collect escrow money from the seller to assure that the seller moves out on time and does not damage the property.
Another possible, and simpler, solution — especially if the post-closing occupancy period would not be long, as is the case here — would be to push back the closing date. That way, the seller can stay a little longer and the buyer is still guaranteed to receive a clean home and title on a certain date without all the perils (and legalese) of a post-closing occupancy.
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