We closed, but the Seller has post-closing occupancy. What should I know?

Congratulations on closing! You are now a home owner and a landlord. The first rule of thumb is not to bug the Seller (now your tenant) about getting out early or about letting you in to measure things and do other things at the house. The tenant is entitled to peaceful enjoyment of the property for the term of the rental agreement, be it days or weeks. If you have to measure for furniture you will need to make an appointment with the tenants to do so at a tie that is convenient for them. Remember that they are also busy trying to get ready to move out, so don’t be a pain in their rear.

You will have the right to do a final walk-through inspection of the property either on the day that they move out or slightly beforehand, depending upon how you set that up during the negotiations for the sale. Hopefully you also negotiated some escrowing of a damage deposit, should they have caused some damage while in their post-closing occupancy or while moving out. Your Realtor® should have been able to advise you on what a reasonable damage deposit would be. The house is supposed to be left in “broom clean” condition for you, but don’t expect it to be spotlessly clean.

Hopefully, your Realtor suggested that you take a lot of pictures of the state of the house before closing, so that you have something to compare the move-out state with. As soon as you closed that became a personal matter of negotiations between you and them and your Realtor won’t be able to help you with that. Just try to be reasonable in your negotiations over the amount of the damage deposit to be retained to cover any damages. If you cannot work out with an agreement on the extent and cost of repairs for any damages with the tenants, your only recourse is to take legal action against them. Things seldom come to that.

If the post-closing occupancy was only for a few days, you may not have to do anything special about the utilities; however, a longer occupancy will require that you make arrangements for the billing switchover to take place at the end of the occupancy and that a final reading be done, so that the tenants pay for the utilities that that used during the occupancy.

You should check with your insurance company to see how this period will be covered for insurance. The tenants should have switched their insurance to renter’s insurance, which covers their possessions, but not the house itself. Again, if it’s only a few days it probably won’t matter, but if it is for weeks or a month or more it may require a special policy rider for that period. What happens if a fire breaks out during this period? As the owner/landlord, you are responsible for the damage to the structure.

You may be better off having your mail continue to your old address or be held by the post off for the new address, rather than trust that the tenants will keep everything that comes to that address for you. If you have things that you ordered on-line being delivered to the new house, make sure that you inform the tenants. They are not responsible for moving heavy deliveries inside for you.

You may be chomping at the bit to get ion and start making changes to the place, cleaning and painting and other things; however, it is not yet your home, so cool your jets. Spend your wait time planning and accomplishing things like choosing paint colors or looking at the furniture that you may wish to buy, once you take possession. Don’t become a stalker, driving by every day to see what’s happening. Have some patience; you’ll be there a long time, once you do get it.

Someday you’ll be in their position, when you sell this place; so, use the Golden Rule and treat them like you will want to be treated.

Norm Werner is a Realtor® working for Real Estate One in Milford, Michigan. Norms helps people buy and sell houses in Southeastern Michigan, in Oakland, Livingston and Macomb Counties You can contact Norm about finding a new home or about getting a Market Analysis for your current home by texting or calling him at 248-763-2497 or click here to go to his web site and fill out Help Form for buyers and sellers.

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