Owners remaining in home after closing..typical? How is that addressed (inspection, taxes, utilities, insurance, etc)?

I have not encountered this previously, and reaching out in case others have any perspective on how commonly that is done, and what are the considerations to ensure you do not end up with expenses or risks, and in fact , compensated for not having the use or access to the home?

In this case seeking 2 weeks post closing. Representing its about needing the funds from closing to close theirs, but usually I thought this is handled through people getting bridge loans, or closing occurring on same day and funds are set up , or any myriad of options.


I think it's common for the previous owners to "rent" the home from you after the purchase. Otherwise I would be very concerned about liability.


Usually handled with a Use and Occupancy Agreement.


Assuming it is something you are able to allow given your schedule, it is something your lawyer will have dealt with many times so just let the lawyer deal with it.

It is common. Sometimes for even months.



Use and Occupancy drafted by your attorney - usually sellers will pay a pro rata for taxes, mortgage and you will also usually put an amount in escrow from purchasing proceeds for any damage etc which they will get back after moving out. Be as specific as you want.


We did Use and Occupancy for the former owner of our Maplewood home when we purchased it many years ago. We almost did it again when we sold our Maplewood home recently, but thankfully were able to finalize a deal for our new home in time to move out on schedule.

Anyway, as others have said, it's not uncommon.


We did it both times we moved here in Maplewood. This last time we needed to have the electrical system replaced in our new house before we could move in because it was deemed a fire hazard. There are many reasons why it can be necessary. When my sister sold her house, she had a 5 month U&O because her new house was being built. In addition to the Use & Occupancy agreement as mentioned above to cover mortgage, taxes and a "damage deposit", we did a rental insurance agreement that covered closing until move out. Both realtors did an inspection of the house once we left before the deposit was returned. There was also a provision for what would happen if we stayed beyond the move out date, though we ended up leaving early.


Any holdover Seller should only be allowed to reside under an "Use and Occupancy Agreement" with clearly delineated provisions regarding removal of items, damage, insurance, indemnification etc. Without a written Use and Occupancy Agreement the Seller can claim to be a tenant and can only be dispossessed under the incredibly tenant friendly N.J. Landlord-Tenant Statutes. If the Seller is an user and occupier, then the Seller can be kicked out by court order in a summary proceeding much more quickly. Best Practice is to hold an escrow of monies deducted from monies due Seller of a significant amount to either be debited for post closing damage or clean-up or to be transferred to Buyer entirely as Liquidated Damages.


Also, if your Seller is requesting the time because Sellers need the proceeds for their purchase, then that is a bit odd. In this day of wire transfers of mortgage loan proceeds, there might only be a day delay in Sellers having the funds. It is more likely Sellers are liquidating other assets for the purchase and need time for those transactions to settle.


back to back closings are so complex ! there is always someone on one side of the transaction who needs in early- but usually I have found its the buyer as there can be delays in mortgage commitments etc-- so before you agree, make sure you have coverage and commitments that you can close on the specified day - seems very odd seller cant coordinate funds on their side for two weeks!


truth said:
Also, if your Seller is requesting the time because Sellers need the proceeds for their purchase, then that is a bit odd. In this day of wire transfers of mortgage loan proceeds, there might only be a day delay in Sellers having the funds. It is more likely Sellers are liquidating other assets for the purchase and need time for those transactions to settle.

Isn't there a three-day right of rescission by the borrower so that the funds can't actually be disbursed or released until that time has elapsed?


Only in refinance transactions.


We rented back our Brooklyn coop when we sold it ages ago. It's pretty common and all the RE lawyers will know exactly what to do.


Fairly common. Your lawyer will know how to handle it.


truth said:
Only in refinance transactions.

Thanks. Didn't know that.



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