Use and Occupancy Agreement when Buyer plans to Occupy Early
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FAQ
Early occupancy, sometimes referred to as early possession, is when a tenant is granted access to part or all of a space they have leased prior to the lease's start date. In most early occupancy cases, a landlord typically agrees to early occupancy as a way to encourage a tenant to sign the lease.
Allowing the buyer to take early possession raises issues of liability, as the insurance remains with the seller until the home sale is complete.
Even though early occupancy agreements are great for the buyer, they come with risks for the seller. In addition to all the risks a normal landlord would have, there is the additional risk of something going wrong with the buyer's mortgage and the buyer not being able to actually buy the house.
Restrictive covenants are common in real estate deeds and leases, where they restrict how owners and tenants can use a property.
If the closing date is set a few days after the first of the month, they may want to move in early so they won't have to make another rent or mortgage payment. Moving in before the closing date is also known as taking early possession of the property.
Risks of Early Possession For example, there can be delays in the underwriting process or last-minute mortgage denials. Unexpected title issues or the home not appraising as expected can also arise. Additionally, a buyer may start making changes to the property without seller consent.