Real estate transactions are full of many, ahem, moving parts. From inspections to appraisals, financing to closing, and everything in between, sometimes, all those pieces don’t align perfectly. Timing can be further complicated when buyers and sellers are navigating multiple transactions simultaneously. 

If a buyer is ready to move in, either because they’ve already sold their other home or due to some other impetus, but the sale hasn’t officially closed, there are options to consider. One is the pre-occupancy agreement, also known as an early possession agreement. 

In some Florida real estate deals, there are situations where a pre-occupancy agreement might make sense. Here’s when buyers or sellers might want to consider one.

What is a Pre-Occupancy Agreement?

A pre-occupancy agreement is a contract that allows a buyer to move into a property before closing day. This type of agreement can be beneficial in certain situations, but it also involves specific risks and considerations for the buyer and the seller.

To learn what is needed if a seller would like to maintain possession of the home after closing, see “What You Need to Know About Post-Occupancy Agreements”.

Situations Where a Pre-Occupancy Agreement Might Make Sense

The terms and conditions of any real estate transaction are unique to the buyers’ and sellers’ needs and preferences, and one area that’s always part of the negotiation is the closing timeline. Even those who want quick closings understand that the process takes time, and there can be delays. 

A workaround for buyers looking to get into the property quicker may be a pre-occupancy agreement. Here are examples of when pre-occupancy agreements get used in Florida real estate transactions:

  • The buyer’s lease is ending before closing – One of the most common reasons for a pre-occupancy request is timing. If a buyer’s lease ends before their closing date and they don’t want to move twice, they may ask to move in early. This can be a reasonable accommodation if all parties are on the same page.
  • There are delays caused by financing or paperwork – Sometimes, all that’s holding up the deal is a lender’s final approval or a few remaining documents. If both the buyer and seller are confident the sale will go through, a pre-occupancy agreement may be a way to avoid costly hotel stays or storage fees. Just be sure to include a clear exit plan in case things fall through.
  • The property is vacant and ready – If the seller has already moved out and the home is empty, allowing the buyer to move in may not pose a major inconvenience. 
  • Minor repairs or renovations are needed – If the buyer wants to get a head start on painting, flooring or other light renovations before officially taking ownership, a pre-occupancy agreement might make that possible. Just be sure to document exactly what work is allowed and who’s responsible if something goes wrong.
Proceed with Caution. Consult an Attorney.

Pre-occupancy agreements can be a win-win in the right circumstances, but they also introduce risks. What if the buyer damages the property? What if they back out of the deal? What if there’s a legal dispute? These scenarios are why having a clear, written agreement is essential.

Have an experienced real estate attorney draft or review the agreement to ensure everyone is protected.If you’re preparing to buy or sell property in the Miami area, it’s important to consider all your options. Our team of experienced real estate attorneys works closely with domestic and international clients who are looking to move to the area.

We can help ensure your purchase agreement is negotiated to meet your needs and that your closing is seamless. Contact our team at the Law Offices of Alex D. Sirulnik, P.A./ADS Title Services, Inc. to learn more about how we can help you.