TERRI’S NOTES
Post Occupancy Agreements: What you need to know
Due to the lack of inventory, it has become popular that as part of the negotiations, Seller requires to stay extra time in the property after closing. Make sure to plan and explore details of agreement before committing to accept this.
The Rider U. POST CLOSING OCCUPANCY BY SELLER is frequently used without noticing or taking the time to explain to the parties that this rider gives either side the right to cancel the contract by giving written notice to the other party if they cannot successfully negotiate a lease or occupancy agreement at a later time. It also states that all deposits shall be refunded to Buyer with no further liability to either party. You may have worked for nothing.
Rider U, is not a firm agreement, it is a contingency to the contract. Big difference.
The space on the first line, if left blank, reads; “Buyer and Seller within 10 days prior to Closing Date …….. accept a written lease……
This clause should be amended to read; 10 days from effective date.
The rider addresses the length of occupancy, the rent amount, the person responsible for providing the lease, but we all know that a lease agreement has many other essential provisions to be negotiated and agreed upon.
A lease should be agreed and executed by all parties within the inspection period. Same amount of time for both contingencies.
The question may arise; Does the approved Florida Bar long lease needs to be used?
The answer is NO. A simple agreement drawn by an attorney may be used, but if a Realtor is to prepare the lease, it needs to be the Florida Bar lease, the only one we are allowed to fill out.
Make sure whatever agreement is used, it is very clear as to:
- Is there a Security Deposit or would it be money from the transaction left in Escrow? There is a difference to consider.
- Who would be responsible for the maintenance and upkeep of the property?/li>
- What happens if Seller/Tenant does not move out on time?/li>
- What happens if Seller/Tenant moves out early?/li>
- What expenses would the Seller/Tenant be responsible for?/li>
- Would the Buyer/Owner have access to the property during this time?/li>
Clarity prevents future conflict.
TERRI ALVAREZ
Broker Associate
Managing Director
FORTUNE INTERNATIONAL REALTY