the date when the seller gives up possession and the buyer takes it over.
What action(s) should be taken when: seller moves out well BEFORE closing and buyer moves in AFTER closing?
-obtain vacancy insurance and secure the house
What action(s) should be take when: seller moves out a little early and buyer moves in at or slightly after closing?
-Nice!! As long as deal closes.
What action(s) should be taken when: seller moves out just before or at closing and buyer moves in at or slightly after closing?
-make sure seller can move out or has a place to go if the closing fails
-prepare carefully to be sure the deal closes
-see if buyer could delay if closing fails
What action(s) should be taken when: seller moves out just after closing and buyer moves in after closing?
-make sure seller can move out after closing
-use Seller's Temporary Residential Lease OR a form agreed to by the parties even though it's just a few days and rent is zero.
What action(s) should be taken when: seller moves out well after closing and buyer moves in well after closing?
-use Seller's Temporary Residential Lease OR a form agreed to by the parties
What action(s) should be taken when: seller moves out well before closing and buyer moves in well before closing?
-try to avoid
-use Buyer's Temporary Residential Lease OR a form agreed to by the parties
A loan may be funded at the closing table, called ____________ or, more often it may fund after the sale.
table funding
Possession date is on closing and funding unless a lease is used.
true
It is very important to let who know if the buyer moves in early or if seller moves out late?
Home insurance company
Any possession before the day of closing or after the day of closing needs a lease. It can be either TREC's temporary lease forms which is usable for terms ___ to ___ days, or it can be done through a standard lease or a custom lease desired by the parties.
1-90 days
The buyer receives the keys at closing. If the seller has not moved out and the buyer has not received the keys, the buyer can rekey the locks but cannot withhold the key from the seller, even though the buyer has legal right to possession. This is possible with a lease.
true
What are some problems with buyer moving in early?
-buyer may discover a lot of items that need repair and may heckle seller with requests
-buyer can have change of heart
-it will be hard to get buyer out of house if deal fails
-gap in insurance coverage.
Sellers should look into getting vacancy insurance. Vacancy insurance has higher rates. Hazard insurance may last a month or two when the seller moves out, but could be dropped if the company finds out property is vacant.
true
Subparagraph 10.B. states
that seller cannot execute a lease after the effective date or convey any interest in the property without the buyers consent.
-seller shall deliver copies of lease and move-in condition forms to buyer within 7 days after the effective date
Temporary Lease forms paragraph 1: Parties.
How should the names be filled in? buyer and seller
-same as on the contract
Temporary Lease forms paragraph 2: Lease (property description) buyer and seller. How should the description be filled in?
-same as on the contract
Temporary Lease form paragraph 3: Terms.
Buyer: the term of the buyer's lease starts at an agreed calendar date and ends when?
Seller: the term of the Seller's lease starts at closing and ends when?
-at closing, unless earlier terminated
-on a agreed calendar date, unless earlier terminated.
Temporary Lease Forms paragraph 4: Rental/Consideration
Buyer: ?
Seller: ?
-amount of rent buyer pays to seller
-seller pays buyer
Temporary Lease forms paragraph 5: Security Deposit
Buyer: pays security deposit that at closing will usually go where? If deal fails what happens?
Seller: pays security deposit how?
-refunded back to buyer; if fails no damages and rent paid, deposit goes back to buyer; if fails and damages or buyer defaults, seller keeps deposit
-most likely deducting it from the sales proceeds .
Temporary Lease form paragraph 6: Utilities
Buyer: Buyer pays utilities which most likely includes what?
Seller: seller pays for utilities
-utility deposit for utility company, unless specified in the exceptions blank
Temporary Lease form paragraph 7: Use of the Property states what? buyer and seller
-under Texas law, a tenant may not assign or sublet without the Landlord's permission.
Temporary Lease form paragraph 8: Pets
This paragraph misses what, so that the tenant doesn't have to pay what?
-there is no pet deposit on this form; landlord can say no to pets; frees the tenant from an extra security deposit
Temporary Lease Form paragraph 9: Condition of the Property.
Buyer: What do we want to buyer not to do?
Seller: What obligations does the seller have under this paragraph?
-we do NOT want the buyer to make repairs to the property before closing; this can cause issues to pop up
-Seller's obligated to make repairs that were stated in the contract
Temporary Lease form paragraph 10: Alterations
This paragraph states what?
-that parties (tenants) should leave the properties condition alone, such as no drilling holes, installing improvement, fixtures, etc. unless stated to do so in the contract (seller repairs)
Temporary Lease form paragraph 11: Special Provisions
States what?
regular lease special provisions
Temporary Lease form paragraph 12: Inspections
This paragraph reminds us of what?
-that a landlord CANNOT enter the property unless they have permission from the tenant.
Temporary Lease Form paragraph 13: Laws
This paragraph states what?
-basic tenant laws to comply with: landlord can evict a tenant who is not a serious buyer, illegal activity, government can seize the property if illegal drug dealing (without compensation to the owner), illegal garage sales, etc.
Temporary Lease form paragraph 14: Repairs and maintenance
This paragraph states what?
-that a landlord must make repairs (at reasonable time) if condition is inhabitable for tenant; this tenant right CANNOT be waived in the lease.
-if no notice is delivered, the Property Code does not obligate the landlord to make repairs
-tenants also have the right to make repairs and deduct the cost from rent.
Temporary Lease form paragraph 15: Indemnity
This paragraph states what?
-tenant takes liability and makes up for damage, keeping landlord unliable.
-this paragraph warns tenant to be careful
-both tenant and landlord could end up in court for third party damages; if tenant declares bankrupcy, damages fall on landlord.
Temporary Lease form paragraph 16: Insurance
States what?
-be sure coverage is in place that will deal with a non-owner occupied/Landlord-Tenant situation.
-if buyer or seller have moved personal property in or left it there, it may need different coverage, "contents" insurance.
-If the insurance issues are not properly attended to, the broker's liability insurance may be hit, along with the broker.
Temporary Lease form paragraph 17: Default
This paragraph states what?
-the landlord must give at least 24 hours notice to the tenant if the tenant fails to pay rent.
-commerical leases often allow landlords to take action for a monetary default with no notice.
Temporary Lease form paragraph 18: Termination
Buyer: Lease can be terminated for what four reasons?
Seller: Seller can be terminated for what two reasons?
buyer: 1. the deal closes and funds. 2. termination of the contract prior to closing which could easily happen because the loan is disapproved, the title can't be cured, or buyer can't sell other house, as required by the lender. 3. the buyer defaults under the lease. 4. the buyer defaults under the contract.
Seller: 1. expiration of the term of the lease. 2. the seller defaults on lease.
Temporary Lease form paragraph 19: Holding Over.
This paragraph states what?
-if deal fails and tenants don't move out, they are liable for reasonable damages.
-caution: once a lease is terminated, the landlord cannot sue for further rent.
Temporary Lease form paragraph 20: Attorney's Fees
What does this paragraph state?
-if a lawsuit arises out of a lease, the loser pays the winner's fees
Temporary Lease form paragraph 21: Smoke Detectors.
What does this paragraph state?
-This lease provision reminds the parties of their obligations as Landlords under the Property Code to install smoke detectors.
-Under law, smoke alarms must be provided for every bedroom or bedroom connecting corridor for post 1981 construction, and at least one per house on pre 1981 construction.
-also check into local ordinances.
-tenants must notify landlord of non-working smoke detectors, otherwise landlords are not liable (landlord must check to see if the smoke alarm works prior to tenant moving in)
Temporary Lease form paragraph 22: Security Devices.
This paragraph states what?
-security devices such as doorknobs, deadbolt locks, pinlocks, window latches, peepholds, and keyless bolting devices need to be installed at landlord's expense; waiver under temporary lease under 90 days.
Temporary Lease form paragraph 23: Consult your attorney.
This states what?
that real estate licensees cannot give legal advice; legal advice needs to be taken up with an attorney.
Temporary Lease form paragraph 24: Notice to Landlord.
all notices must be hand-delivered to both parties
Temporary Lease is limited to ___ days.
90 days
What exemption from certain laws for 90 day leases for used with sales?
-exempt from concerning the installation of security devices; unless tenant stays longer than the 90 days; double check with local ordinances
Any lease longer than 90 days is likely to be done on a _______ or ______ lease. It is wise to use a __________ if longer than 90 days.
-T.A.R
-T.A.A.
-Non-TREC lease
Author
Blue2xa88
ID
321216
Card Set
RE Contracts Ch. 10 Possession and Temporary Lease Forms