Use and Occupancy
We’re negotiating a contract and the seller is asking for either a use and occupancy agreement or a delayed closing while she closes on her new house. Our lawyer says that this is totally common and no big thing. My father in law flipped and said it sounded like the most crazy insane thing he’d…
We’re negotiating a contract and the seller is asking for either a use and occupancy agreement or a delayed closing while she closes on her new house.
Our lawyer says that this is totally common and no big thing. My father in law flipped and said it sounded like the most crazy insane thing he’d ever heard.
So, um, whose right?
Have you ever heard of gut feel? It’s a perfectly reasonable request (which you don’t have to comply with.)
If you have some flexibility on when you move in, why not extend the same to your seller?
I say keep the house and get rid of the father-in-law, he’s obviously too much on the curmudgeonly side.
Ummm, if FIL hasn’t worked in NYC real-estate, then disregard his advice. Real estate here is like nothing I’ve ever seen elsewhere. That said, I’ve heard of this happening outside of NYC. Just make sure that the lawyers are handling it.
OP here, thanks for the insights.
Could have added that my father-in-law has worked in real estate for years, though not in NYC. I’m inclined to at least take his concerns seriously.
Hmmm. Whom to listen to, your paid and educated professional or an in-law. Seems like a pretty easy decision to me.
i did it when i closed on my coop… be sure to have the terms detailed clearly in the contract and have high penalties written in case they overstay their welcome. they should pay rent either by the day or by the week. lawyers typically don’t like to allow this but sometimes it is the only way to get things closed. good luck!
Definitely find out whether she is NOT insane (i.e., going to close on her new house, has contract, has mortgage she needs approved, and that her sellers are ready to go – and not delaying her in a domino effect that extends down to you, etc.) – that is, a sane person just needing to time this right.
Or, alternatively, find out if she is insane – not insane really, just in a fantasy world regarding her ability to close on a new place.
If it is the latter, walk. If it is the former, decide if you can live with the risk and of use and occupancy and if so, be sure your attorney is good with the language in the contract, as noted above.
Personally, I’d prefer to do delayed closing if it wasn’t too long – sellers can delay closings for some time under the standard contract anyway, and it does happen that buyers sometimes are then stuck with the cost of putting their stuff in storage for awhile, even when they didn’t intend to, just because of the delay sellers can cause under the standard contract terms.
Also, have your attorney walk through the other risks that can come with use and occupancy, v. the risks of delayed closing. Different buyers perfer different things, depending on their situation and how they view certain risks.
We had this and everyone assured us it was no big deal. We made sure that it was very expensive for the seller to stay past a certain point. They had to pay per diam on our mortgage, our rent, living expenses, and 100$ a day to stay past the first week. They gave us a check at closing to cover the costs of the number of days that they would be staying.
Putting those costs in the contract reduced their stay from 30 days to one week.
Fairly typical. I rented my old apartment back from buyers for a month. Lawyers drew up tight language. Only issue is, as above said, their closing gets pushed back, someone’s inconvenienced. If it’s a good offer, then maybe worth the additional (probably minor) hassle. Good luck,
If your apartment was on the market for a while (or even if it wasn’t and you got market or just below), then you should consider the offer. It might be the best one you get.
Depending on where you live/what you’re trying to sell, sellers can’t be choosers in this market, so you need to be prepared to be more flexible. Don’t let your father-in-law jeopardize your deal. Just make sure that you get plenty of money in escrow to cover those potential problems.