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What Is a Use and Occupancy Agreement?

April 13, 2021

While many people may try their hardest to have moved out before the time of closing when they are selling their home, situations may arise in which it won’t be possible for them to be out of the house when they originally anticipated. When you sell your home, it is important to plan the closing according to your own circumstances in terms of your ability to move into a new residence. On the day of the closing, the purchasers will expect to have the keys to the home and the house to be in broom swept condition, cleaned and clear of all junk, garbage, and debris. Many deals are contingent on this fact.

It is important to plan your move based on the closing date as to not scare off any potential buyers because they may have to move in as soon as possible, depending on their situation. The buyer needs to know that they have the ability to move into the house. In some cases, they will not be able to have a lot of flexibility as far as a moving date because it is possible that their lease has ended or their home has sold and therefore, they have no place to stay. If for some reason you cannot move out before closing, you need to let your attorney and realtor know up front and as soon as possible so perhaps an arrangement can be done for what’s called a “Use and Occupancy Agreement,” where the parties agree to have the seller stay beyond the closing and pay for the carrying costs of staying there.

In the event that a Use and Occupancy Agreement must be obtained, it is important for both parties to understand it’s terms and conditions so there is no confusion about the length of time in which the seller can stay in the home under the agreement. Many times, these agreements are tailored to the specific situation that the buyer or seller is in and therefore, it is important to seek legal counsel from your attorney if you think you may not be able to be out of your house by the time the home sale is closed.

Juan C. Velasco, Esq. is a trusted attorney who has been serving the New Jersey area for over 25 years. If you are in need of experienced legal counsel, please contact Velasco Law Officer and we will be happy to assist you.