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  • Writer's pictureAttorney Jason A Greller

Rent Back Agreements Between Buyers and Sellers in Wisconsin.

A rent-back agreement, also known as a post-closing occupancy agreement or seller leaseback, is an arrangement in which the buyer allows the seller to remain in the property for a specified period after the closing of the sale. These agreements can be useful when the seller needs additional time to move out or secure a new residence, and the buyer is willing to accommodate the seller's needs.

Here are some key elements to consider when discussing rent-back agreements in Wisconsin:

  1. Duration: The rent-back agreement should clearly state the duration of the seller's occupancy. This period can range from a few days to several weeks or even months, depending on the needs of both parties. It is essential to have a fixed end date to avoid potential conflicts. If the buyer is using a lender to purchase the property they may be limited to a 60 day post closing occupancy term as the standard mortgage form for Wisconsin requires the borrower to occupy the property within 60 days of closing.

  2. Rent: The agreement should specify the rent amount the seller will pay to the buyer for the duration of the occupancy. The rent could be based on the buyer's mortgage payment, fair market rent for the area, or another mutually agreed-upon amount.

  3. Security Deposit: The buyer may require the seller to pay a security deposit, which can be used to cover any damages or unpaid rent during the rent-back period. The terms of the security deposit, including the amount and conditions for its return, should be included in the agreement.

  4. Maintenance and Utilities: The rent-back agreement should outline the responsibilities of both parties regarding maintenance, repairs, and utilities during the post-closing occupancy period. Typically, the seller will continue to be responsible for utilities and routine maintenance, while the buyer will assume responsibility for any major repairs.

  5. Insurance: It is essential to address insurance coverage during the rent-back period. The buyer should ensure that their homeowner's insurance covers the seller's occupancy, while the seller may need to maintain renter's insurance for their personal property.

  6. Liability and Indemnification: The rent-back agreement should include clauses addressing liability for any damages or injuries that may occur during the seller's occupancy and indemnification provisions to protect both parties from potential claims.

  7. Termination: The agreement should include provisions outlining the process for early termination, such as penalties for the seller if they fail to vacate the property by the agreed-upon date or remedies for the buyer if they need to take possession sooner than planned.

When entering into a rent-back agreement in Wisconsin, it is crucial for both the buyer and the seller to consult with a qualified attorney to ensure the agreement complies with local laws and adequately addresses their needs and concerns.

Please note that this information is for general informational purposes only and should not be taken as legal advice. Consult with a qualified attorney or real estate professional to discuss your specific situation and understand your legal options.

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