This seems like a simple enough section. Well it is – until you add ‘pre’ or ‘post’ to the beginning of ‘possession’.
The contract states ‘Seller shall deliver possession, occupancy, access to keys and/or means to operate all locks, mailbox, security systems/alarms, and all common area facilities to Buyer at COE.‘ So basically when the deed has been recorded at the appropriate county recorder’s office, the seller must hand over any keys, garage door remotes, mailbox keys, alarm codes, gate keys, anything and everything that operates a lock or entry system to the property. While most sellers will hand over all of their keys, there are times where they may forget one or tow. It’s always a good idea to re-key all the locks in your new home after the close of escrow.
Now let’s discus pre-possession. Let’s say a buyer and seller agree to a pre-possession arrangement. The buyer moves in 3 days prior to the close of escrow and there’s a kitchen fire. Now who’s responsible? The buyer hasn’t purchased the property yet, so they probably don’t have an active homeowner’s insurance policy yet. The seller probably hasn’t canceled theirs yet, however it’s not a landlord’s policy so the insurance company probably isn’t going to dish out any dough. The same situation can happen with a post-possession agreement.
There are so many nuances and ‘what-if’s’ to consider when negotiating a pre or post-possession agreement. It is wise to consult the proper legal, insurance, tax and accounting professionals. Often times they will be able to counsel on the specific terms or conditions to negotiate into the agreement to protect the parties involved in the transaction.