A post occupancy agreement is used infrequently in Florida but it does come up from time to time. Note that a residential lease DOES survive a sale so this is only applicable when the property is not encumbered by a residential lease but rather it is the Owner who wants to remain in possession AFTER the sale. Most of the time the Buyer wants the Seller out of the Property at Closing. While this certainly makes it easier for all those involved there are occasions where it is beneficial to the Seller, and perhaps even the Buyer, for the Seller to occupy the Property after the sale is closed. The standard FAR and FAR BAR amendment to the base Contract basically lays out: Who is going to pay for the lawyer to draft the post occupancy agreement. And, when one must be approved by both parties. It’s an agreement to enter into an agreement within a certain time line…
HOWEVER, If you are a Realtor and a cooperating member of the South Broward Board of Realtors then this document will be in your Form Simplicity program and, although a pretty basic Post Occupancy, I am told that IF it is then it MAY be used…
A few things to keep in mind in a post occupancy are:
- The Buyer is (assuming it is an As-Is Contract) accepting the Property in the As-Is condition at Closing. How can it be inspected (walk through) if the Seller has not vacated the Property?
- The Seller (now the occupant) must agree to maintain the property in the condition it was received in at Closing, but what exactly is that?
- Does the association allow leases? If they only allow say one a year does this count as that single lease? What about if they do not allow leases at all in say the first year or even two, will they allow this?
- Does the Lender for the Buyer allow the Buyer to NOT occupy the Property right after Closing? If the Buyer is getting a loan based upon the Property being their primary residence then the loan/mortgage covenants will require that they occupy the property as such within (and this may vary) 60 days of Closing. Even if not their primary residence then will throw a flag as an investment property instead of a second home?
- Who will insure the Property? The Seller can no longer do this as one can NOT insure what one does not own. They can get renters insurance but the property must be insured by the new owner (Buyer).
- Should the Seller (now the occupant) pay rent? how about a security deposit for any damage? If so, who holds onto that money?
