The Post-Occupancy Agreement

Real Estate Broker/Owner with HomeBuyer Brokerage

Important Details To Understand When Signing a Post-Occupancy Agreement

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Photo by Kaitlyn Baker on Unsplash


Home buyers planning to purchase a home in the current market need to consider all their options to be competitive. It's not uncommon for a seller to review four or more offers for a single property in the Greater Washington DC area. Here are a few ways buyers can make an attractive offer-

  • All Cash Offers are frequently given more attention than offers with conventional, FHA or VA financing.
  • Writing a Contract with Limited Contingencies. The home inspection addendum includes the following options: the right to negotiate and cancel, the right to cancel, radon, lead, mold inspections. There are also financing and appraisal contingencies. Discuss all of these contingencies with your true buyer agent to have a thorough understanding of how to proceed and what suits your needs. 
  • Pre-Contract Home Inspection is an inspection done prior to writing an offer. It is an added cost to the Buyer but allows the Buyer to write an offer that is not contingent on what is found in the home inspection. Again, understanding what is right and wrong with the property is the first step before deciding to move ahead with an offer, not contingent on a home inspection. 
  • Flexibility with the settlement date can be a great relief to the Seller. This is only an option if it's within your comfort zone as a Buyer and does not cost you lots of additional money in a month-to-month rent situation or something similar. 


If a Seller needs extra time to locate another property, move out of the area or just needs time to move after the settlement date, there is the post-occupancy agreement. this agreement means the Buyer permits the Seller to occupy after Settlement and under certain conditions.

  • Seller agrees to pay an occupancy charge that will be determined and agreed upon by Seller and Buyer. This charge covers the Principal, Interest, Taxes and any Mortgage Insurance plus any condominium fees, HOA fees and property insurance premiums
  • The Settlement Attorney holds a security deposit to cover any damages or costs incurred by the Seller while living in the property. 
  • The Seller and Buyer agree on an Occupancy Deadline which is when the Seller vacates the property leaving it broom clean and in the same condition it was on Settlement. 
  • The Seller maintains and repairs the Property including plumbing, existing appliances, heating, air conditioning, equipment and fixtures in the same condition as Settlement Date. 
  • The Seller maintains insurance on the property, keeps all utilities registered in their name until the Deadline and allows the Buyer "reasonable access" to the property. 

When everyone sticks to the rules of the agreement, all goes well and Buyer moves in after the deadline. The problems we've faced have to do with understanding the rules. Here's what we learned along the way-

  1. The post-occupancy agreement is not a landlord-tenant agreement. A seller once told us, "I know my rights as a tenant!" But he was not a tenant. The occupancy charge is not rent but rather a temporary right to use the property. This is a unique agreement only used when a Seller and Buyer agree to the occupancy terms.
  2. The Seller must maintain the property including the maintenance on all the appliances and major systems. It's important for all parties to read and understand the terms of the agreement. For example, in a condominium, the management company requires yearly maintenance checks on all HVAC systems and if not completed by their deadline, it costs hundreds of dollars in fines.

If you are using a post-occupancy agreement, check in with the listing agent, management company and any other players to be sure everyone is following the rules of the agreement. It all goes well if everyone understands and follows the rules however it can take a bad turn quickly if you are not careful. 

Posted by

Victoria Lynne Henderson

Real estate broker and business owner of HomeBuyer Brokerage serving buyers in Washington DC, Maryland, and Virginia. Victoria was born in Washington D.C. and loves her hometown!

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Comments (1)

Myrl Jeffcoat
Sacramento, CA
Greater Sacramento Realtor - Retired

This post provides important information about post occupancy agreements, Victoria.

May 23, 2019 09:56 AM