Pros And Cons Of Use And Occupancy Agreements

Use and occupancy agreements
Use and occupancy agreements can be helpful for certain situations.

Buying and selling a home can be a whirlwind. Sometimes, things don’t go exactly according to plan, and closing dates get pushed back. This can leave both buyers and sellers scrambling for a place to stay. That’s where a use and occupancy agreement comes in.

A use and occupancy agreement is a temporary contract that allows either the buyer or seller to occupy the property before or after the official closing date. It essentially bridges the gap between when one party needs to move out and the other can move in. But, like any contract, there are advantages and disadvantages to consider. We discuss in more detail below.

Benefits for buyers

  • Move in Early: Need a place to stay before closing? A use and occupancy agreement grants access to the property, eliminating the stress of temporary housing.
  • Test Drive the Property: Living in the space before buying can reveal hidden issues or confirm it’s the perfect fit.
  • Financial Flexibility: Use and occupancy agreements can be cheaper than temporary housing, offering breathing room during the transition.

Drawbacks for buyers

  • Accidental Landlord: You become responsible for the property, including potential repairs and maintenance, before officially owning it.
  • Limited Rights: Unlike a lease, a use and occupancy agreement doesn’t offer the same level of tenant protections. Be clear on what you can and can’t do on the property.
  • Damage Deposits: Use and occupancy agreements often require a hefty deposit to cover potential damage during your stay.

Benefits for sellers

  • Extra Income: Charge the buyer rent during the use and occupancy period to generate income while you find your next place.
  • Moving Flexibility: Need more time to find a new home? A use and occupancy agreement allows you to stay put for a negotiated period.
  • Peace of Mind: Knowing the property is occupied can deter vandalism or squatters while the house is vacant.

Drawbacks for sellers

  • Potential Delays: Letting the buyer move in early can push back renovations or repairs planned before the sale.
  • Property Wear and Tear: There’s a chance the buyer could damage the property during their stay, leading to repair costs.
  • Unforeseen Circumstances: What if the buyer needs to extend their stay? A clearly defined use and occupancy agreement minimizes complications.

Helpful tips for use and occupancy agreements

Use and occupancy agreements should be drafted by a real estate attorney to protect both buyer and seller. Clearly outline the terms of occupancy, including duration, financial obligations, and responsibilities for maintenance and repairs. Open communication is key. Discuss expectations and potential issues beforehand to avoid misunderstandings.


Use and occupancy agreements can be a valuable tool for navigating unexpected situations in real estate transactions. However, it’s important to weigh the pros and cons for your specific situation. Consulting with a real estate attorney is essential to ensure your use and occupancy agreement protects your interests. With careful planning and a well-drafted contract, a use and occupancy agreement can help ensure a smooth move for both buyers and sellers.

Are you thinking about buying or selling real estate in the South Florida area? We can help! Contact Natasha at Live South Florida Realty, Inc. today! Also, be sure to download the free Florida Home Search app for your smartphone or tablet.

By natasha moore

REALTOR® with Live South Florida Realty, Inc.