Pat Kapowich for the San Jose Mercury News
Q: We sold our home with the stipulation that we could Rent-Back the house for up to six weeks. The Buyer’s agent is now asking us to sign a Rental Agreement and put up a deposit. We feel this is a little silly based on the circumstances. Our friends just rented back their home for two months without any rental form. My husband does not want to sign, which is causing a flurry of e-mails. How common are these Rent-Back agreements anyway?
A: Not common enough! Savvy agents will reference a Rent-Back agreement in the blank part of the purchase contract under “additional terms or conditions.” Other agents will simply write something about a rent-back period and rate, but not stipulate that a written rent-back form will be executed. Regardless, many Sellers feel it is a personal affront to even suggest a rental deposit is required. It is important to note: Sellers seldom damage the home, the movers often damage the property ~ for example, marked-up vinyl or hardwood, doors and door jams. It’s equally important to remember that rent-back agreements protect everyone’s interest. So much so that those agents should incorporate a Rent-Back form with the original purchase offer or counter-offer.
Now is certainly not the time for a cumbersome three-page residential lease agreement. Instead, make sure the agents involved use a preprinted one- or two-page rent-back form. It includes terms such as “seller in possession after close of escrow” or “seller occupancy after sale.” The rent-back forms should not make your husband uneasy. In fact, its purpose is to make him feel at ease about his brief tenancy.
4/3/10
Send questions for the Market Wise column in the San Jose Mercury News to Pat@SiliconValleyBroker.com