One of the most important provisions of an occupancy agreement is the provision dealing with what happens in the event of a delay or non-compliance with the agreement by the buyer or seller. Keep in mind that a pre-billing contract can be breached by either the buyer/tenant or the seller/owner. Similarly, a post-billing contract may be breached by either the seller/tenant or the buyer/owner. Appropriate provisions must be developed to address each of these contingencies. In other words, if you have an occupancy contract before the count, what happens if each party is late in payment? What happens if one of the parties is late in a post-billing contract? If you are thinking about the different consequences of a default by either party, you may need to develop very different provisions to address the consequences of default by each party. The post-billing contract includes liability coverage, fire or flood plans, electrical bill processing, and maintenance of equipment and devices. In addition, the post-billing contract highlights the consequences of the infringements. It is also important to ensure that buyers and sellers have the right type of hazard and liability insurance for the property during occupancy. Who bears the risk of loss if the property is damaged or destroyed by fire or other disaster during the period of occupation? The buyer who is taken into possession before the count cannot rely on the owner`s policy that begins on the day of the billing. The buyer is not yet the owner of the house. Whether you represent the buyer or seller if you are involved in a real estate sale transaction in which the buyer will occupy the property before the count or the seller will occupy the property after the count, it is important to ensure that the conditions of occupancy are properly documented. Sometimes the parties and real estate agents involved in such transactions do not focus on the fact that an agreement on the occupancy of the property by the buyer before colonization or occupation of the property by the seller after the count is essentially a lease agreement between the parties.
Therefore, the occupancy agreement should cover the same fundamental issues that are addressed in a duly developed lease. Although the seller remains the owner of the house during pre-occupancy by the buyer, the seller is no longer the occupant of the house and the seller`s policy cannot cover the property for the duration of the buyer`s deposit. A call to the seller`s insurance agent can resolve the issue. In most cases, a final passage through the house is made before the beginning of the seller`s occupation. This allows both parties to see the condition of the house, and it protects the buyer from the damage that the seller can cause during restocking. It is important to closely respect the deadlines set out in the post-settlement contract for the loss period.