Seller(Tenant) Temp Lease Help

[DP Patel]

I am relatively NEW to REI and also on BP (2 months) but found this forum very helpful. I need your advice on my 1st property temp rental.

I am about to do my 1st ever SFH buy-n-hold closing on 6/30. Everything is in sync and ready to go. Today, I have heard from Seller's realtor (thru my realtor) that Seller wants to do a TEMP resi lease for 48 hours from ME with an option to extend it further for $42/day. So, they can transfer a fund and complete their NEW home closing with the down payment of my closing. The avg rent expected from a regular tenant is approx $1,400/per month. Here are some more details:

Seller (Tenant) Temp Resi Lease Terms:

• Lease commence on closing date and terminates 48 hours later
• Tenant pay $0 (Zero) as rental for 48 hours with $0 Deposit with all utilities paid by tenant
• Tenant pay $42/per day during the possession after the termination of the lease

Buyer (Landlord) Intention

• Since, it's a summer time, I (Buyer/Landlord) would prefer seller (tenant) to vacate as early as possible so I can put it for regular rent
• Is it reasonable to offer 48 hours for FREE without ANY rental/deposit? BTW, That was a suggestion from my Realtor (Buyer)
• Can I have HEAVY penalty beyond termination of temp lease (beyond 48 hours) for ex very HIGH daily rent $100/per day, after termination of the lease so, there is a clear message to seller (tenant) to vacate the property as early as possible.
• Also, I have few service like minor work with GC and promoting for rental has been lined up from 7/1.

Any feedback/advice will be greatly appreciated.

Thanks,
DP

[Colleen F.]

I would say no- certainly to a no pay clause.  There are rent back clauses but the rent should escalate closer to a hotel fee then a monthly rental.  Something like 100.00/ day then occupancy beyond a certain point at a higher rater.   You would also hold money in escrow for that.  Basically they are asking to fail to give possession for a relatively nominal fee.    They can put their stuff in a truck and store it for the interim or they can have some amount held in escrow and the rent deducted for the time they occupy your property for this short term lease. I would make that escrow amount at least 1 months fees.  I wouldn't expect to get a check from them for rental if they are proposing this- I would expect they are tight on funds.    You can just say no ,  you have a contractor lined up. Alternately make the security and cost significant so they have an incentive to leave.