Another important difference between a lease and a lease is their lifespan. “A U-O is only for a short period of time and out of necessity,” says Shea Adair, a real estate agent and investor in Raleigh, North Carolina. “A lease is targeted, in which someone wants to use and occupy a structure for a long time and must therefore agree with it.” According to David Reischer, a real estate lawyer and CEO of LegalAdvice.com, an OU also facilitates the evacuation and removal of a person from a property if something goes wrong with respect to a rental agreement. “A U-O should always indicate that the contract creates a simple license to occupy the premises and is not a rental agreement,” he explains. Marc Lagrois, a high-end real estate agent from Michigan, says occupation is very common after closing. “It doesn`t diminish the attractiveness of the property as long as it`s a reasonable time frame,” he says. Enter the use and occupancy agreement. Often referred to as “U-O,” it is a fairly common agreement between a buyer and a seller, where one of them is allowed to occupy the property for a certain period of time. In some cases, the buyer is the one who asks for the OPU so that he can move into the house, while he is still waiting for a mortgage to be concluded and before the property is legally transferred. It is important to understand that this agreement is not the same as a lease. While it is best to let a lawyer or real estate agent explain the differences between the two, it essentially means that buyers are not considered tenants. As such, they do not get any tenant rights.
The contract allows them exclusively to use the property. In most cases, a use and occupancy contract is established to respond to one of the following common scenarios: Real estate transactions are made up of many moving elements. Sometimes, especially when it comes to funding, these parties do not assemble well enough to get to the billing table on time. In situations like this, a use and occupancy agreement can help. Read below to learn more about what a usage and occupancy agreement is, how it works and how you can use it to keep your transaction together. Sellers should also make the general language of compensation provided that “during the duration of the occupation, buyers must keep the premises in good condition and must not make, suffer any tape or waste for the premises, nor suffer from illegal or inappropriate use of premises and buyers agree to compensate the sellers and save them unscathed from any liability the losses or damage resulting from these additions. , modifications, blades, waste or any illegal or inappropriate use, of any harassment inflicted or suffered by purchasers on the premises, including their family, friends, relatives, guests, visitors, agents or servants, or by negligence, negligence or misbehaviour of a person.” On the other hand, the U-O may allow the seller to stay in the house for some time after closing (also known as the “rent-return” agreement).