SELLER STAYING AFTER COE?
If you are writing an offer on a property where the seller is planning to stay in the home after close of escrow (even for a couple of days), you need to protect your buyer. When writing the offer, make sure you include a PAA and complete section 2 – even if the seller is staying for a day or two.
If the seller plans to stay for 30 days or more, make sure you use a Residential Lease After Sale agreement. You may consider using this form for less than 30 days to really be safe.
Remember, the moment escrow closes, if the seller (or a tenant) is still living in the property, your buyer may be faced with possible eviction, regardless of what the contract states. In the case of a short sale, where there is no money going to the seller and the seller may be strapped for cash, it’s a good idea to make sure they are out of the property prior to close of escrow.
Keep in mind, there are liability issues, tenancy issues and damage or theft concerns once escrow closes and your buyer owns the home but doesn’t have possession of the property.
Whenever possible, take possession at close of escrow. When impossible, protect your buyer by using the PAA or Residential Lease After Sale contract.
NOTE: if the home is in Notice of Default and the seller is staying longer than 30 days beyond close of escrow, it is no longer considered an owner occupant purchase – even if your buyer is intending to occupy the property eventually, you must use an NODPA (Notice of Default Purchase Agreement).