Understanding the Situation

Buying a new home can be an exciting and life-changing experience. However, in some cases, a previous owner may refuse to leave the property, causing significant stress and financial burden for the new homeowner.

According to a recent study, most home-buying contracts successfully reach closing, with only 6% of all purchase agreements terminated and 12% resulting in delayed closings.

Let’s consider an example scenario: Kara just bought her first home, but the seller, Marcus, negotiated with Kara to stay for 30 days after closing. Now, Kara is dealing with a former owner who won’t leave despite the fact that 30 days are up.

The Post-Occupancy Clause: A Key Factor in Resolving the Issue

When Kara allowed the former owner to stay, this decision may have created a landlord-tenant or occupancy relationship, depending on state law and the terms of the agreement.

Jonathan White, managing partner at the real estate firm Jordan & White, LLC, explained that a post-closing occupancy agreement might characterize Marcus as a tenant or a licensee.

However, if Kara and Marcus had no written agreement, but Marcus was allowed to remain temporarily and then stayed longer than he should have, many jurisdictions treat him as a type of holdover occupant.

That characterization drives whether you proceed through the summary eviction process or a different court action, and the two move at different speeds.

The Eviction Process: A Lengthy and Complex Procedure

Regardless of how Marcus is characterized under the law, Kara is most likely going to have to go through some type of formal legal process to get him out.

White explained that the eviction process may not begin the way you’d expect, as calling the police accomplishes nothing.

Officers arrive, look at the deed, listen to both sides, and tell the buyer this is a civil matter, which is the correct answer under the law in most places.

The court process can take anywhere from several weeks to several months, depending on whether Kara must go through a full eviction process or can take advantage of summary eviction.

During the full eviction process, Kara may have to provide written notice to Marcus, file the paperwork with the court, and prove Marcus has no continued legal right to the property.

However, if Kara proves that Marcus should be evicted and the court rules in her favor, then the court should give Kara a writ of possession, which she can take to the sheriff to enforce.

Unfortunately, this is all something Kara perhaps could have avoided had she known better.

As White explained, in practice, a negotiated payment to get the occupant out, sometimes called cash for keys, resolves the situation faster and cheaper than litigation.

This feels unfair, but it’s often the right business decision.

Preventing Similar Situations in the Future

Real estate lawyers like Barry E. Janay, Esq., recommend avoiding situations like this by including clear terms in the purchase contract.

Janay explained that when they represent buyers, they try to avoid these situations with ‘use and occupancy’ agreements because they can last longer than anticipated and lead to disputes.

However, if a seller absolutely needs such an agreement, they make the terms pretty onerous, especially if the term expires or the seller requests an extension.