What is delayed possession when it comes to home buying and selling? Sometimes called use- and-occupancy or rent-back, a delayed possession is a short-term contract that allows for a home seller to keep living in the home after the closing date. It treats the home sellers much like a renting tenant after the closing, setting move-out dates, daily rental fee and other terms.
Sometimes when buyers and sellers are completing a sale, the seller might not have lined up moving into their next home or are renovating their next home and it’s not ready yet, or the seller might need more time for a child to finish school. One viable option to problem-solve this situation is for the parties to agree on a post-occupancy agreement or post-closing agreement. This helpful arrangement gives the buyer ownership but lets the seller keep living in the home for a short period of time after closing, typically limited to 30 to 60 days maximum.
Rent-back terms will be written into the closing documents and include rent that is calculated on a daily basis, a security deposit, information on who will be paying for utilities and maintenance during this term and confirming renter’s insurance for personal property.
As this agreement is done in good faith, there are of course risks for the buyer. But it can be a great situation for both parties, as the seller gets the extra time they need, and the buyer can make a sometimes-significant daily rental fee.
