Post Occupany Agreement: All You Need To Know

Post Occupany Agreement: All You Need To Know

This article will take a look at how post-occupancy arrangements work, why sellers request them, and what pitfalls buyers should be aware of.

After closing, you start moving your stuff in and getting ready to spend the first night in your new home…right? Not always. Sometimes sellers need to stay in their home for a bit longer after closing. This is called post-occupancy. A post-occupancy agreement might be part of the initial contract, or it’s negotiated after the contract has been signed.

Below, we’ll take a look at how post-occupancy arrangements work, why sellers request them, and what pitfalls buyers should be aware of.

How Are Post Occupancy Arrangements Made?

In Florida, realtors commonly use the Florida Realtors® CR-6 Rider U Post-Closing Occupancy by Seller. The rider, which the buyer and seller must both agree on, creates a contingency. By a stated deadline (or 10 days before closing), one party must present an agreed-upon lease or occupancy agreement. The buyer and seller must agree on the length of the post-occupancy period and the rent. All other terms, such as utility costs or HOA fee payments, are up to the buyer and seller.

If both sides can’t agree on terms of post-occupancy, either side can cancel. Then, the contract is terminated and the buyer will get their deposit back. Or, if the buyer and seller want to go through with the sale without the rider, they can negotiate their own post-closing occupancy agreement.

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Why Do Sellers Want a Post Occupancy Period?

Sellers may need to (or want to) stay in their home after closing for a number of reasons.

  • To allow more time for moving out: Moving is a long process. Some sellers need more time than the closing date allows, especially if unexpected circumstances arise such as a family emergency.
  • To let kids finish the school year: When a move results in switching school districts, a seller might prefer staying in their home for the remainder of the school year. That way, their kids can finish out the year before starting at a new school or district. This is more common with closing dates that occur later in the school year.
  • To allow more time to find a new place to live: Sometimes home sales progress faster than the seller anticipated. Or, the seller’s future living arrangement falls through or is delayed. In those cases, a post-occupancy agreement can give the seller more time to close on a new home or find an apartment.

Potential Pitfalls of Post Occupancy Agreement

In some cases, post-occupancy agreements work out great for the buyer and seller. The seller gets the extra time they need in the home, and the buyer receives rent payments to cover costs during the post-occupancy period. For buyers who thought they’d need to cover mortgage payments and the remainder of an apartment lease simultaneously, that extra income is very convenient. Plus, the buyer still has a place to live during the post-occupancy period.

Unfortunately, post-occupancy agreements also have their pitfalls. And in a competitive market, buyers might feel pressured to agree to a post-occupancy period. Make sure you fully understand what you could be getting into and speak to your realtor about any concerns you have.

Seller Refuses to Leave

You, the buyer, now own the home, but the seller is refusing to move out. Unfortunately, this can happen. And the solution isn’t fast. If the seller refuses to move out after the post-occupancy period ends, you’ll need to initiate the eviction process. In Florida, this can take three to four weeks. Eviction costs can add up, especially if you need to find alternate lodging for your belongings and your family in the meantime.

Seller Doesn’t Pay Rent on Time or In Full

In a post-occupancy arrangement, the seller becomes a tenant. They should pay the buyer rent and pay any utility costs as stated in the agreement. If the seller is late on rent or refuses to pay, the buyer still needs to come up with the cash for the mortgage and utility payments.

Seller Takes Stuff Out of the Home

Your buying contract details what the seller agreed to sell with the home. For example, appliances and light fixtures, like chandeliers. During a post-occupancy period, the seller could decide to remove those items from the home, leaving the buyer with unexpected expenses or a court case on their hands.

Seller Causes Damage to Home After Closing

During your final walkthrough, you examine the house, property, and other included buildings to ensure everything is in order. However, between closing and the end of a post-occupancy period, any number of problems could occur. Whether intentional or accidental, the cost of fixing damages could quickly add up.

Seller Does Something That Doesn’t Comply with HOA

As the homeowner, you are the responsible party to the homeowners association.  If the seller is breaking any of the rules or regulations of the community, you could be on the hook.

Ways to Protect Your Interests

Sometimes the only way to close on the home you want is to agree to a post-occupancy arrangement.  Here are some ways to protect yourself as a buyer who is allowing the seller to remain in the property for some period of time:

  • Escrow protection: Require a percentage of money from the sale remain in escrow as a security deposit. The funds can pay the buyer for unpaid rent, damage caused by the seller, or missing items, such as appliances.
  • Penalty fees: Instituting a daily fee for every day that the seller stays beyond the agreed-upon move-out date.  This should be a hefty number so they are motivated to move out on their deadline.
  • Walk-through inspection: Requiring a walk-through before releasing remaining escrow funds.
  • Require Insurance:  You can require that the tenant obtains a renters insurance policy during the post-occupancy period.
  • Do a Background Check: It’s common for landlords to conduct background checks on renters, so this measure can also apply to post-occupancy leases.


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