Seller Possession after Closing and Buyer’s Right of Entry

QUESTION: My client recently purchased a property, and the parties included Form 2A8-T (“Seller Possession after Closing Agreement”) in the contract to allow the sellers to stay in possession for three months after closing. The buyer purchased the home as an investment property, and intends to turn it into a rental. Even though the sellers knew my client’s intention, the buyer called me this morning very agitated, because the sellers are not allowing her to show the house to potential tenants. Can the sellers prevent the buyer from entering the property and showing it?

ANSWER: Yes. Form 2A8-T warns at the top of the document that it should only be used for short term occupancy, and that it does not address important issues typically addressed in a residential lease. One of those important issues is the landlord’s right of entry.

Unless the landlord reserves the right of entry in the lease, the general rule is that the landlord has only the same right as any other person to enter the leased property. Form 2A8-T does not have a provision allowing the landlord to re-enter the property for any reason. Form 410-T (“Residential Rental Contract”) preserves the landlord’s right of entry for several purposes, including showing the property to prospective tenants and displaying “For Rent” signs in a reasonable manner on the leased property.

In transactions where the buyer wishes to take possession before closing or the seller wants to remain in possession after closing, brokers are encouraged to carefully review, as applicable, Form 2A7-T (“Buyer Possession before Closing Agreement”) and Form 2A8-T with their client(s). These forms allocate responsibility for important issues, such as repairs during the tenancy and due diligence rights, in very different ways. After reviewing these forms with the client, brokers should confirm this discussion in writing to avoid difficulty after the contract is executed.