early

Possession of a home usually changes from seller to buyer at settlement, but in some cases a home buyer asks the seller to grant possession before settlement takes place. A common situation whereby early possession is requested is when the buyer must move from there current home before a loan can be processed. Vendors make the final decision as to whether an early buyer possession is allowed.

If, as a vendor, you do agree to early buyer possession, it should be handled with a written agreement that describes the duties and responsibilities of both parties. Most real estate agents have access to a standard contract addendum that covers early buyer possession. Or, if you prefer, a solicitor can draft the document.

Considerations for Early Buyer Possession

  • Wording should include details about what will happen if the sale does not settle on time – or never settles. How much time do buyers have to vacate? And what will happen if they don't?
  • How much rent will the buyers pay and when is it due? What is the bond?
  • Buyers should agree they will not modify the home without the consent of the owner. If settlement doesn't take place, buyers should pay to return the home to its former condition.
  • Utilities should be the responsibility of the buyers, with all accounts in the buyers' names.
  • Home sellers still own the home, so insurance for the structure and any items remaining is the seller's responsibility. Buyers must insure their personal items.
  • Standard forms usually include a statement releasing sellers from liability if something negative happens to buyers while they are living in the house.
  • Will pets be allowed? There are times when buyer possession before settlement can help both parties.

If you feel it's a good move, simply proceed with caution. And always seek legal advice if you have any doubts about the written agreement.