Pre-Closing Possession Agreement
(Residential) (Pro-seller) (NY)

Summary

This residential pre-closing possession agreement template sets forth the terms and conditions of a purchaser's permitted occupancy of New York residential real property prior to the transfer of title to the purchaser. This template includes practical guidance, drafting notes, and optional clauses. In residential real estate transactions, it is often difficult to coordinate a closing date due to factors such as the sale or purchase of an additional residence by one of the parties, title defects requiring additional time to remedy, or lender processing delays in funding the purchaser's loan. Consequently, it may be desirable for the purchaser to take possession of the premises prior to closing or for the seller to remain in possession after closing to accommodate the various needs of the parties. Most attorneys discourage their clients against entering pre-closing possession due to the risks involved. To safeguard the parties' respective rights, the parties should enter into a pre-closing possession agreement addressing relevant issues such as shifting the risk of loss from the seller to the purchaser, insurance coverage, condition of the premises, payment of the license fee and a security deposit, adjustment of taxes and utilities, the expected date of closing, and the consequences of not closing. It should also address the purchaser's occupancy status as either a license (preferred status) or tenancy. This New York template favors the seller. The capitalized terms used in this template should be conformed to the defined terms in the relevant contract of sale. This template should not be used for condominium, cooperative, or commercial property. For more on New York residential real estate transactions, see Purchase and Sale of Residential Real Property (NY).