After the sale is finalized, the property would be in the possession of the seller even though they are no longer living there. The seller rents back the house to the purchaser. ..

Situations in which can you enter into a post-closing agreement

  1. The purchaser is not ready to move in yet, and wants to keep the property until they are ready.
  2. The purchaser is moving out of state, and does not want to have to deal with the hassle of selling and moving.
  3. There has been a change in circumstances since the date of sale, such as a new resident moving in or a family member needing care.
  4. The seller needs some time after the sale to get their life back together. ..

The seller is purchasing a new house and to complete the sale transaction of that house, he requires funds that he is raising by selling this house. To avoid moving out for just a few days until the closing of the new house, the seller may want to stay in the old house until the purchase of that house is completed.At the time of finalizing the sale agreement, the purchaser would be getting a good interest rate that he would not want to lose, hence he would enter into a sale agreement before the seller is ready.The seller would have notified the purchaser that their new house is being renovated due to which they cannot move out and would have to occupy the old house until the renovations are completed.Purchaser agrees to the seller’s post-occupancy demand because he is terrified of not finding another property as per his wishes.

Terms and Conditions

A post-closing agreement should clearly state the purchaser’s and seller’s names and other personal information. It should mention the period of occupancy, the settlement date, and the daily occupancy rate. The amount of security deposit that the seller deposited for this agreement. The liabilities of the purchaser and seller should be stated clearly like who would be accountable for the utility bills, the plan of action if a disaster occurs, and who would look after the maintenance of appliances and fixtures.

The agreement should have a clause that stipulates the consequences of breach of the agreement. For example, if the seller would have to pay a double or triple the daily occupancy rate for every additional day, forfeiture of the security deposit, or pay additional fees. The agreement should end with the signatures of the purchaser and seller and real estate agent who holds security deposit. ..

Can a post-closing agreement be made without a lawyer?

If you choose to write your own post-closing occupancy agreement, be sure to consult with an attorney for help in drafting a legally sound document. If you choose to use a contract template, be sure to review the document carefully before signing it. By doing so, you can ensure that all of your interests are protected and that the costs associated with the agreement are reasonable. ..

Areas of concern in a post-closing agreement

The post-closing agreements are tricky and should only be made as a last resort. They should be drafted keeping in mind that all the parties to the agreement are protected and with legal guidance. If not made with care, then these agreements can have serious repercussions for both parties. The liability in the post-closing occupancy period generally falls onto the sellers. The agreement should have a clause to specify who would be responsible for the liabilities in case of any damages or loss. Like every contract there is a risk of non-fulfillment of the contract and here it is if the seller refuses to leave the property even after the occupancy period is over. The contract should state what would happen in such a scenario. Probably the most unnoticed clause of the agreement is that the agreement is a license and not a lease. A license is just permission to do something on the property, in this case, it’s a license to stay on the property. Whereas, a lease is a transfer of the right of the immovable property. ..

Conclusion

A post-closing agreement can work in the favor of both parties to the contract if drafted correctly. However, there is always a risk factor attached to it. The purchaser and seller should consider all areas of concern before finalizing the contract.

The important points of the agreement are:

  • Escrow is a way to protect money and ensure that it is released when the deal is completed.
  • Carrying costs are paid by both parties, and will be reduced as the deal progresses.
  • Monetary damages can be awarded if one party breaches the agreement.
  • Insurance can be purchased to cover any potential financial losses.
  • The release of escrow can be arranged, should one party not meet certain conditions.

The post-closing occupancy agreement is a contract between the tenant and the landlord in which the tenant agrees to leave the property after the lease has expired. The rent-back agreement is a contract between the landlord and the tenant in which the landlord agrees to pay back part of the rent that was paid by the tenant during their lease term.

A 60-day period is an ideal time to consider hiring an attorney. This allows you to get a full understanding of your case and to make decisions about what steps you need to take in order to win.