Anything can happen in a real estate transaction. Unfortunately, one of the more unpleasant ones is a “holdover seller” who has not vacated the property by the day of closing. When the seller doesn’t vacate, a domino effect ensues as the buyer may be on a tight timeline to vacate his own sold property. As the buyer, once you’ve signed the closing papers and all money has been wired to the appropriate party, you’re the owner. Still, some sellers come up with excuses for not leaving on time, such as:
∙ Trouble with scheduling the movers
∙ Trouble packing up the contents of the house because of family circumstances
∙ Want extra time because their next place wasn’t ready for them
∙ Refuse to leave because the property was foreclosed and they had no alternative plans
A standard part of the Cincinnati Area Board of Realtors® purchase agreement includes the following wording:
“Seller acknowledges and agrees that prior to Buyer taking possession of the Real Estate, Seller shall remove all personal possessions not included in this Contract and shall remove all debris. If Seller fails to vacate as agreed in this Contract or any attached post-closing occupancy agreement, Seller shall be responsible for all additional expenses, including attorney’s fees, incurred by Buyer to take possession as a result of Seller’s failure to vacate.”
It’s not unusual for sellers and buyers to have a post-closing occupancy agreement that allows for the seller to stay for a defined period of time, but such an agreement must be in writing. Without it, the seller has violated the terms of the purchase agreement and is staying in your new home for free. Oftentimes the buyer and seller can work out an arrangement on a short timeline that both parties can live with. But when they don’t, the threat of getting sued can be enough to get the seller hiring a company or soliciting friends to help them pack or schedule moving as quickly as possible. When a seller is more desperate to stay and even refuses to move, the buyer must start the process of eviction. This involves the buyer taking legal action and could take weeks or months to get the seller out of the house.
Steps You Can Take to Protect Yourself from the Holdover Seller
First, ensure that your purchase agreement includes concrete terms of possession such as the standard clause noted above. Second, ensure that your agreement clearly states your occupancy date. And third, hold a walk-through in the new home one day prior to the closing. It is your right to refuse closing if a seller appears to have packed little to nothing the day before the closing transaction. You have the most leverage before the seller has your money.
Abandoned personal property and debris the seller has left behind for their own convenience also falls under a violation of the purchase agreement. You can delay closing based on too much stuff left behind. During the walk-through, also ensure that everything appears to be in the same (or better) condition as when you made the offer. The importance of the walk-through cannot be overemphasized. Know your rights as a buyer, ensure the terms of occupancy is covered in the purchase agreement, and leverage the walk-through for your protection.