Purchase Contracts: Possession After The Transaction is Completed
Possession is the last action in the process of purchasing real estate, when the buyer takes full control of the real estate that was legally transferred. At closing, the buyer gets the keys to the home and, as an important corollary of the moment, the old owner no longer has a right to be in the home.
Sometimes a seller will ask for your permission to retain the home for a specified period of time after the closing. As the buyer, you have the right to say yes or no, but before making that decision, there are some angles to keep in mind.
Sometimes, in the last days of activity just before closing, a seller may ask the buyer for time to vacate the home, or to clean up loose ends related to the move. Though the request may seem to be reasonable, a buyer should consider it cautiously. If the buyer decides to allow the request for extension, they must, at least, be made to pay rent for any additional days.
There must be a firm limit placed on the length of time the seller can stay in the property after closing, and it must be in writing. A clear agreement between the buyer and seller setting forth the details of the after-closing possession can be drawn up by the attorney.
The seller may approach the situation by putting you on the spot. If the seller says at the time of closing or immediately before that he or she needs to stay longer, it is usually a good idea to reschedule closing until the seller can clear out or the appropriate paperwork has been written and agreed upon.
As a buyer, contract closing represents your transition into the responsibility of an owner. This is true even if it is occupied by someone else. If the seller accidentally causes a fire that damages the house, it is your loss. The seller will not have to pay for the loss unless it is spelled out in the agreement.
Sellers who retain possession after closing are less motivated to take good care of the property and make needed repairs. When you purchase any real estate, you accept it in the state in which it is found at the time of closing.
Liability Is at the Core of the Most Serious Aspects of the Problem
Whatever occurs to the property after the closing accrues to the buyer, regardless of who is actually occupying the property. So if a door gets broken or a hole mysteriously appears in a door, you are the person that will have to pay for the repair.
Another common problem with letting the seller retaining possession after the closing date is that items that should remain with the home can vanish in unexplainable ways between the closing and the time that the buyer finally takes possession of the property. As a general rule, the owner of the property -- and have no doubt about it; that's you, no matter who is living there -- is stuck with the loss when this happens.
As buyer, you have a responsibility that goes with your investment. It is in your best interest to insist on possession at the time of closing, or to delay the closing until the former owner has gotten out and can turn over the keys.
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