When a Seller asks to remain in the home for any period of time after the purchaser closes on the purchase of the home, a Post-Closing Occupancy Agreement should be entered into to govern what happens during such period of time that the Seller remains in the home. These agreements can become contentious and can often be a shocking reason why a deal falls apart.
Some of the issues that should be addressed in the Post-Closing Occupancy Agreement involve clarifying exactly how long the Seller may remain in the home, how much the Purchaser should be compensated for the inconvenience, what happens if the Seller defaults, what are Purchaser’s remedies for any such default, whether there is any escrow to ensure Seller performs its obligations and, if there is an escrow, how much will be escrowed.
The Purchaser and the Seller can be surprisingly far apart on these terms, because the Seller’s view is that they are simply asking for a little extra time to move while the Purchaser is concerned they may become an unwilling landlord instead of enjoying their new home. This discrepancy can make it a challenge to successfully negotiate a Post-Closing Occupancy Agreement.