Release Date: 08/08/2017
QUESTION: I represented the buyer on a transaction that has just closed. The contract included a Seller Possession After Closing Agreement (form 2A8-T) that permits the seller to remain in possession of the property for 3 weeks. The buyer wants to get the ball rolling on ordering new floor coverings throughout the house, but the seller is refusing to allow the buyer’s carpet man to come into the house to do measurements. Can the seller refuse to allow the new owner to come onto the property she has just bought?
ANSWER: Yes. The Seller Possession After Closing Agreement is a type of lease that is governed by the laws relating to leases. As a general proposition, if a lease does not provide to the contrary, the landlord has no right of entry upon the leased premises during the term of the lease. If a landlord desires a right of entry for inspections, to make repairs or for other purposes, a provision should be inserted in the lease to that effect. Unlike the Residential Rental Contract (from 410-T), the Seller Possession After Closing Agreement does not contain a provision that reserves a right of entry for the buyer/new owner; thus, your client likely does not have any right of entry without the seller’s consent.
As prominently stated in the “Warnings” box at the top of the Seller Possession After Closing Agreement, the form “does not address important issues typically addressed in a residential lease drafted for a long-term occupancy.” We are not saying that a long-term rental agreement should necessarily have been used in your situation instead of the Seller Possession After Closing Agreement. In fact, the presence of a right-of-entry provision doesn’t guarantee a landlord a right of entry if the tenant refuses to allow it. It would give the landlord a right to evict the tenant for breach of the lease, but in a short-term lease, how practical would it be to go through an eviction proceeding?
Your situation illustrates the fact that seller possession after closing and buyer possession before closing arrangements should be avoided if at all possible and, if absolutely necessary, limited to the shortest period of time possible. The shorter the time period, the less likely a problem will arise like the one your client is encountering.
If a party to a transaction anticipates a need to access the property during a period of occupancy by the other party, they could attempt to negotiate the inclusion of a provision that would permit such access. Such a provision should be drafted by an NC-licensed real estate attorney.
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