24 hrs before closing, seller demands 30-day post-close occupancy

[Garrett Spear]

In April I got a four-plex under contract, sourced from the MLS. The seller/owner occupies one apartment and the other three units are used as storage. The seller took their time getting their loan payoff and tax information together, and we had to push our initial closing date back about a month. Frustrating, but not a deal-breaker.

We were scheduled with the title company to close today, but yesterday afternoon the seller's agent contacted me and advised that the Seller needs a 30-day post-closing occupancy agreement. They said that the seller hasn't moved their stuff out and hasn't found a place to stay.

I was surprised, but I replied that we might be able to work something out, if there was some sort of consideration: security deposit and rent payment. The seller is refusing to pay rent or security deposit, and now is threatening to break contract. I suggested we reschedule the closing (to give them time to move), which they also denied.

I feel that I am taking on too much risk and liability if I let the seller keep possession of the property. The extremely short notice and lack of security deposit or rent are also red flags for me. I don't want the contract to fall through, but I don't want to close on this property without being able to take possession.

What are your thoughts, BP? 

Have you ever been in a situation like this/ What would you do?