Buyer should charge daily rent, have written agreement

Q: We closed on a house, but we didn't take possession for three weeks. The sellers needed the money from the sale before they could close on their new home.

When we did move in, there was damage to drywall plus other damage. After some persuasion, the sellers did make the repairs, but it was a stressful situation. This was a for sale by owner.

For any period longer than a week after closing, should you usually set up a rental agreement and get rent for that period that the sellers are occupying -- just to protect yourself for any damage that might occur until you take possession? -- e-mail

A: I'd like to think that if you'd had an agent or a lawyer, you would have been advised about precautions to take when the sellers remain for even one day after closing.

Any time strangers occupy a house you own, you should have a written agreement. You might have taken pictures to document the condition of the place and required a security deposit to cover potential damages. You should also have checked about insurance coverage.

What would you have done if the closing on their next house was held up and they didn't get out? It can sometimes be complicated to evict people who are not legally your tenants. Nor was it fair that you were paying expenses on the house, property taxes and mortgage interest, while they had your money and were living there for free.

A common arrangement is for seller-tenants to pay enough daily rent to cover your expenses. In addition, a written agreement may provide that if they remain after the expected period, the rent keeps increasing so that they are motivated to make other arrangements and move out.

Similar precautions are needed in the opposite case -- when buyers need to move in before closing. That can lead to all sorts of complications. What if, for example, the buyers run into last-minute financial trouble and can't close? Or decide, after they get there, that they don't enjoy living in the house and want out? Real estate brokers are usually dead set against letting buyers move in ahead of time.

Edith Lank will respond personally to any questions sent to her at 240 Hemingway Drive, Rochester, NY 14620 (please include a stamped return envelope), or readers may e-mail her at ehlank@aol.com.