Use And Occupancy Agreement Vs Lease

According to David Reischer, a real estate lawyer and CEO of, an OU also facilitates the evacuation and removal of a person from a property if something goes wrong with respect to a rental agreement. “A U-O should always indicate that the contract creates a simple license to occupy the premises and is not a rental agreement,” he explains. 2. Duration: a use and occupancy contract must close the gap between the start of the occupation and the closing date; However, there is usually a termination of the occupancy date only if the closure does not take place. Great article. Timing perfect too, because I have a buyer who is waiting for a short sale and who may have to move in before closing. I`ve already felt with that, but the article spells things out quite simply. Use and occupancy agreements can be very useful. When a buyer and seller sign a use and occupancy contract, the buyer should take a “walk” before the start of the life. It`s important for two reasons.

First, if the transaction is completed at the end, it is really the best (and sometimes only) opportunity to ensure that the property was in the required condition, as stated in the purchase and sale contract. Second, it is likely that the use and occupancy agreement will insist that the buyer is responsible for the damage caused to the property during the term of the contract. A passage allows the buyer to note and document any problems or damage, so that the buyer is not liable for the damage caused before the beginning of the period if the transaction is ultimately not concluded. The buyer and seller can work with the agent and lawyer to draft the agreement in writing, establish a daily use rate and establish certain conditions. B such as payment or collection. Buyers and sellers will both want to make an exemplary passage of the property to document the condition of the house and disempower themselves. Here`s what you need to know about usage and occupancy agreements so you can use them effectively if you need them. An occupancy agreement does not have the same defined form as a lease in Ontario. In cases where a buyer actually needs to move into the home before making the final purchase, a use and occupancy contract may be the only option that can maintain the unit of the transaction. Use and occupancy are usually used when a home buyer is in a really difficult place and not just for convenience.

The problem starts with treating an occupancy agreement as a lease without the same rule as a standard lease.