BIC TIP #1248: Seller Becomes a Landlord
Does your seller want to be a landlord? Because if they agree to let the buyer move in before closing, that is exactly what they are signing up for. Stephen Long explains that buyer possession before closing creates a temporary landlord-tenant relationship, with the seller as the landlord.
A Simple Favor With Big Strings Attached
The request usually sounds reasonable. The buyer’s lease is ending, the moving truck is booked, and closing is still a week or two away. Can they just move in a little early?
It feels like a friendly accommodation. Legally, though, it changes the relationship between the parties. Once the buyer is living in the home before it is theirs, the seller has taken on the role of landlord, and the buyer has become a tenant.
Landlords Have Responsibilities
As part of being a landlord, the seller must maintain safe, fit, and habitable premises. That is not a suggestion. It comes with the territory.
Stephen offers a very real example: if the HVAC goes out during that temporary tenancy, the seller, now acting as landlord, would be responsible for that item. In the middle of a North Carolina summer, that is not a small problem, and it is not one most sellers anticipated when they said yes.
Inform Your Seller Before They Agree
As the listing agent, your job is to make sure the seller understands what they are getting into. Walk them through what early possession means, what responsibilities come with it, and what could go wrong if the deal does not close as planned.
If the seller is comfortable with that role, no problem. Just make sure they are well informed going in, and that the arrangement is properly documented using the appropriate buyer possession before closing agreement. If questions come up that go beyond the form, suggest your seller consult a real estate attorney.
The Practical Takeaway
Allowing a buyer to take possession before closing makes your seller a temporary landlord, complete with the duty to keep the home safe, fit, and habitable. Explain the responsibilities clearly, let the seller make an informed decision, and execute the buyer possession before closing agreement properly if they move forward.
