In real estate sales, Early Occupancy refers to the practice of allowing the buyer to take possession of the subject real property before the “closing” of the transaction.
It is usually not a recommended practice. Such a practice should be carefully evaluated because of risks, such as mechanics’ liens, inadequate insurance coverage, and “buyer’s remorse,” with possible litigation as a result.
It’s essential for both parties to have a clear agreement regarding Early Occupancy, outlining the responsibilities, terms, and any potential financial arrangements. Consult with legal and real estate professionals before engaging in an Early Occupancy arrangement.
Buyers typically pay a fee or prorated rent for the time they occupy the property before the official closing date.
Note: Buyers who move in early may not, generally, be subject to landlord-tenant rules, so if the buyer fails to buy, the seller may have a great deal of difficulty evicting the buyer. The parties should sign a written early-occupancy agreement to cover these risks.