Did you know that home buyers get keys at closing, even if you are renting back?
If you are selling your Silicon Valley home, you may have an agreement to stay on in the home after the close of escrow. Depending on the length of stay, you may be referred to in the paperwork as a “seller with a license to possess” (29 days or less with the CAR form) or you may be a tenant (30 days or more with the CAR form).
Why home buyers get keys at closing when there’s a rent back
As a non-owner, you of course have a landlord or property owner that you are dealing with and who likely has your security deposit. And landlords or property owners have keys to the property non-owners occupy. Should an emergency arise, the property owners need access.
Some listing agents and some home sellers do not realize that providing a set of keys to the buyers at the close of escrow is the norm. Not only is it the norm, it’s in the California Association of Realtors or CAR purchase agreement. (If you are buying or selling real estate, you really do need to read what you’re signing!)
What does the contract say?
Here’s the “chapter and verse” from the CAR contract
Contract Paragraph 9F (RPA page 11 / 14)
“At Close Of Escrow, unless otherwise agreed in writing, Seller shall provide keys, passwords, codes and/or means to operate all locks, mailboxes, security systems, alarms, home automation systems and intranet and Internet-connected devices included in the purchase price, and garage door openers.”
Here we see it’s not just that home buyers get keys at closing, but that they are entitled to all of the systems related to doors and locks and security. (Think Ring or Eufy or Nest doorbell.)
“If Tenant re-keys existing locks or opening devices, Tenant shall immediately deliver copies of all keys to Landlord. Tenant shall pay all costs and charges related to loss of any keys or opening devices. Tenant may not remove locks, even if installed by Tenant.”
Take the time to read the contract and understand the timeline and hurdles
Listing agents and home sellers need to talk about this ahead of time so that they are prepared to part with keys at the time when the sale is completed. Not to worry, nervous sellers, there are lots of protections for you and your peace & quiet. You will find those listed in the residential lease after sale or the seller in possession contract paperwork, too.
By the way, this isn’t the only place where real estate consumers can be surprised. The CAR purchase agreement also provides 17 days for the buyers to have access to the property from the time their offer is accepted. Sometimes listing agents don’t point this out, or sellers forget that it’s there, but if a seller is living in the home it can feel disruptive to have the buyers coming and going, plus the appraiser, in those first two weeks or so.
Final walk throughs are also a contractual right for home buyers, whether or not there’s a rent back – and sometimes we’ve gotten pushback from sellers who don’t want to be inconvenienced by another visit if the sellers are living in the home.
What if you are a seller and do not want so many visits or interruptions to your life while in escrow?
Let’s say you are a seller and you’re living in the home. If you read the contract and see the 17 days for access, you can ask your listing agent if that can be countered to a shorter number of days. Better, if you read the contract before offers are presented, you can ask your Realtor to instruct buyer agents and buyers that a term you request is no more than X number of days for access.
Sellers and buyers are both best protected when they read whatever they will be signing and make sure that they understand it, whether it’s about repairs, access, or any other element of the paperwork, such as that home buyers get keys at closing. Not only that, but there’s a lot less upset and ruffled feathers when they know what to expect.
For more reading on this topic:
Seller rent back after close of escrow: what do you need to know?
More articles on home seller tips
