Chris Combs Arizona real estate law article below brings up a nightmare scenario for buyers.
Your moving van is outside your newly purchased home but the seller refuses to leave. What do you do?
Wow! That’s a big problem.
Chris gives you the short legal answer.
My short economic answer (for Arizona) is to make sure your Realtor puts in a Cure Period Notice the very same day the Sellers were supposed to move out, and then call a real estate lawyer.
I have a list of Arizona real estate lawyers I’ve collected over the years. Feel free to call me for it.
If the Seller wanted to stay in the home after closing, the Seller should have said so from the beginning and a post-closing possession agreement could have been negotiated amicably as part of the contract to purchase the home.
Post-closing possession agreements are common. I like to put in post possession agreements that the Seller will pay the Buyer $X per day (it could be a nominal amount) for the agreed upon period (1 or 2 days would be common) and if the Seller stays beyond that period the price goes up drastically to $Y per day, where $Y is prohibitively expensive.
If the Seller wants to stay in the home for more than a few days, a lease should be prepared instead of a post-closing possession agreement. The lease rent should become prohibitive after the agreed upon time period. You can also add to the lease agreement that the escrow company would hold back some of the Seller’s money as a security deposit to be released to the Seller upon the Buyer’s taking possession.
When a lease or a post possession agreement is negotiated with the purchase contract, everyone knows the rules of the game and Seller’s realize it will be very expensive for them if they stay beyond the agreed upon time period. That clarity and penalty usually are enough to motivate the Seller to get out as agreed.
Another point. I’m guessing that the buyers bought from a for-sale-by-owner who didn’t know his legal obligations. If the Seller was indeed represented by a Realtor, that Realtor did a terrible job of informing his client of his client’s obligations under the contract.
I love this part.
The only “good news” in this bleak scenario is that your damages, attorneys fees, and court costs should be recoverable from the seller.
Potential contract breaching sellers, please take note.
This is yet another reason why you should use a Realtor when purchasing a home. And what does this service cost you? It’s usually free to the Buyer.
2 responses so far ↓
1 Jodi // Apr 1, 2008 at 11:02 pm
What if the buyer doesn’t close by agreed upon closing date? What recourse does the seller have? Do they get to move back in to the home they moved out of by the agreed upon closing date or what? Isn’t that breach on the part of the buyer?
2 John Wake - Real Estate // Apr 1, 2008 at 11:16 pm
Jodi,
Let’s assume that the seller didn’t let the buyer move into the home before closing and it’s vacant but the buyer’s haven’t pulled the money together in cash and loans to close.
In the Arizona Association of Realtors standard contract which is used in most transactions, the seller should notify the buyer that they are in potential breach of the contract because they didn’t bring the money to the table at closing as agreed in the contract, and the seller gives the buyer a 3 day “cure period” to cure the problem.
After the 3 days, if the potential breach still exists, it becomes an actual breach of the contract and the seller can, but doesn’t have to, cancel the contract.
And then the fight over the earnest money begins.
I’m not a lawyer and there are a ton of variables that can change things but that gives you one common scenario.
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