4. Use restrictions: a use and occupancy agreement generally includes restrictions on use, such as. (b) a provision prohibiting the purchaser from committing undue waste or making substantial changes to the property or structural changes such as painting.B. the installation of flooring or changing rooms. Sellers seemed open to the buyer for the materials, but not for the time spent working from home. Worse still, the buyer`s friend landed with all his new furniture because he wasn`t going into his existing home. It is not difficult to see how this situation can become problematic. After all, buyers are not yet on the title if the house is in trust, and essentially live in a house that is not yet its own. When a seller agrees to allow a buyer to move in before closing, both parties must be aware of potential problems that may arise in this impractical situation. The wording should contain details of what will happen if the sale is not completed on time – or if it is never closed. Determine how long buyers have to evacuate, and define what happens if they don`t. Sellers can charge a proportional rent for the days that buyers spend in the apartment before closing. You should indicate how much buyers will pay and when they are due.
They should include the terms of a security deposit, if any, and decide whether to include utility companies in the rent or whether buyers transfer the supply accounts in their own name. Although early occupancy agreements are excellent for the buyer, they pose risks to the seller. In addition to all the risks that an ordinary homeowner would have, there is an additional risk that something will not go wrong with the buyer`s mortgage and that the buyer will not actually be able to buy the house. If this happens, the seller must worry about taking the former buyer out of the house while he tries to resell it. Home sellers will negotiate with buyers a wide range of factors, from price to whether the chandelier stays or works in the dining room. In some cases, a buyer may ask if they can move in before the sale officially closes. Buyers after moving in may recognize certain defects in a home. Whether the seller is unaware of the problems or simply does not disclose them, such defects may discourage buyers to the point that they may decide to cancel the agreement (if the necessary clauses are included in the contract) and demand the return of their deposit. An early occupancy agreement usually has several conditions. First, the inspection period must be completed and the buyer and seller must give written consent on the items that will be repaired before the buyer arrives. If you move in, accept ownership of the house and accept that the condition of the house is satisfactory. When a buyer and seller sign a use and occupancy contract, the buyer should take a “walk” before the start of the life.
It`s important for two reasons. First, if the transaction is completed at the end, it is really the best (and sometimes only) opportunity to ensure that the property was in the required condition, as stated in the purchase and sale contract. Second, it is likely that the use and occupancy agreement will insist that the buyer is responsible for the damage caused to the property during the term of the contract.