Allowing early possession - any issues ?

[see_change]

We're selling our PPOR , an illness , a couple of misunderstandings , we may not be in a position to settle on the day . We've asked the buyers if they can delay , but they have indicated they can't . Packed , leaving rental and removal it's booked .

Legally we could play hard ball, but that would just create a very stressful situation for everyone involved .

The easiest option is too offer them early possession . I know it can be an issue if you allow the owners to stay after settlement. Our solicitor has advised us this would be the easiest option and she hasn't seen issues with this .

They need to provide evidence of insurance and pay rates etc

Anyone one out there aware of concerns re allowing early possession.

Cliff

 

[westminster]

There are a zillion but your REA should have a pretty good standard Possession Prior to Settlement form for them to sign

This should cover them paying for any damage to the property done by them if settlement doesn't go ahead, them being responsible for blah blah

I have allowed 2 Possessions Prior to Settlement. With each of these there was a standard form (which you can add to) which outlines their responsibilities.

 

[Terry_w]

The biggest issues is what if they don't settle, rip out the kitchen and urinate on the carpet.

 

[see_change]

The biggest issues is what if they don't settle, rip out the kitchen and urinate on the carpet.

Unlikely re kitchen and urine , though they are English ...

Settlement would be the issue , but then we get the deposit once we get them out .

Cliff

 

[see_change]

The biggest issues is what if they don't settle, rip out the kitchen and urinate on the carpet.

Have you ever seen that happen ?

Cliff

 

[Peter_Tersteeg]

To mitigate them being English you could ask for evidence that they're in a position to settle. A copy of their finance approval, current cash balance or similar might be helpful.

 

[Terry_w]

Have you ever seen that happen ?

Cliff

I have seen the urinating the ripping out of the kitchen and the not being able to settle, but they have never occured all together (yet).

 

[Terry_w]

Peter's idea is good. You have to make sure they have something to get at if it all goes bad and you need to sue.

 

[westminster]

The biggest issues is what if they don't settle, rip out the kitchen and urinate on the carpet.

With my first Possession Prior To Settlement they wanted to do renovations, ie put in a new tile floor so part of the agreement stated that any 'works' done would have to be reversed (though in reality new tiles was a winner for me unless they were super ugly)

 

[Ausprop]

I still remember these words "never ever allow early possession"

tho I have wondered, could you set up a RTA agreement for the interim period?

 

[Terry_w]

I still remember these words "never ever allow early possession"

tho I have wondered, could you set up a RTA agreement for the interim period?

Not a good idea as RTA usually have a minimum period of 6 months, no matter what is in the agreement. A licence to occupy may be better.

I actually sold a property last year and allowed the purchasers to move in before settlment under a licence agreement. It can be risky though.

 

[Of The Vultures]

It can be risky, a friend of mine bought a property in Sydney a year or two back to renovate and sell. Sold at auction post reno and allowed early possession as the new buyer was an elderly lady, what could go wrong? Well she had two dodgy sons interstate who were stumping up the cash for the house, and they didn't pay, settlement didn't go through, they somehow ended up living in the property too (despite apparently living in Melbourne).

Couldn't get them to pay up or move out for over 6 months. Eventually they paid but not before my friend spent $10,000 on lawyers plus holding costs on half a million for over 6 months... and the stress drove him mad, he resorted to calling A Current Affair so must have been pretty desperate!

Tread with caution.

 

[Kate Ashmor]

Licence Agreement

A licence agreement could facilitate their occupation prior to settlement. My clients have entered into these from time to time. Have never had one go pear-shaped.

Requirements include that the adjustments (Council rates, water) at settlement (when it eventually occurs) are dated from the date occupation commences. Evidence of a current insurance policy could also be required under the agreement.

If both parties are motivated to honour the contract and settle, a licence agreement is a good way to avoid messy default.

Good luck!

 

[chi3f]

Agree with Kate, a licence agreement would be the way to go.

I've recently done this for a property I sold late last year and had no issues whatsoever.