Marc Lagrois, a high-end real estate agent from Michigan, says occupation is very common after closing. « It doesn`t diminish the attractiveness of the property as long as it`s a reasonable time frame, » he says. According to David Reischer, a real estate lawyer and CEO of LegalAdvice.com, an OU also facilitates the evacuation and removal of a person from a property if something goes wrong with respect to a rental agreement. « A U-O should always indicate that the contract creates a simple license to occupy the premises and is not a rental agreement, » he explains. Another important difference between a lease and a lease is their lifespan. « A U-O is only for a short period of time and out of necessity, » says Shea Adair, a real estate agent and investor in Raleigh, North Carolina. « A lease is targeted, in which someone wants to use and occupy a structure for a long time and must therefore agree with it. » Use and occupancy contracts are generally made up of two main concepts: on the other hand, the O.U. may allow the seller to remain in the house for a period of time after the conclusion (also known as the « rent-return » agreement). In markets where stocks are limited, as we have seen in the wake of the COVID 19 pandemic, sellers are more likely to apply for O-O agreements because it is more difficult to find their nearest property.
It is generally much easier and less expensive for sellers to distribute a « tenant » under the terms of a rental agreement than to distribute a buyer in possession of a sales contract addendum. If these decisions are not correct for you, then consider a short-term occupancy agreement with the buyer of your current home. In North Carolina, real estate agents can complete drafts for you on the standard « Seller`s Property After Closing » contract. This agreement allows you to re-rent the property to the buyer for up to 14 days. The same option is available to you on the house you buy if that seller agrees, because real estate agents also have access to a « Buyer Possession Before Closing Agreement ». Sometimes there is nothing you can do to prevent delays, but the best prevention is communication. Contact your real estate agent, lender and directly with your law firm at an early age. Make sure they all have everything they need to help you close without delay. Whether it`s the purchase or the sale, it`s important to get back the documentation requested from all parties as soon as possible. The buyer`s early ownership should be settled with a written lease separate from the sales contract and in addition to the sale agreement. In most cases, a use and occupancy agreement is established to address one of the following common scenarios: while a use and occupancy agreement may seem very similar to a lease, there are some fundamental differences.
The lease agreement should describe the obligations and responsibilities of both parties. Realtors can provide a standard contract addendum covering the buyer`s possession early, but a lawyer can design the document if one of the parties prefers it, and sometimes with a separate lease may be preferable. Sellers should conduct a thorough background review of their buyers before accepting early ownership, and home sellers and buyers should consult with their lawyers before signing binding agreements.