Getting rid of the seller after the holding period has expired is the buyer`s greatest risk, as well as maintenance problems. The application of a formal Holdover occupancy agreement significantly reduces these risks by demonstrating in writing the agreed terms – in a nutshell, in memory. [See first Tuesday Form 272] The amount that increases the rent under a Holdover clause varies from lease to lease. There are exceptions to a Holdover clause, so it is important to carefully verify the terms of a maintenance clause (and all other clauses in the agreement) before signing. In addition, arrangements are made, as part of an interim occupancy agreement, to take early possession of the replacement property at the time of the closing of the sales agent before the closing of the purchase on the replacement house. [See first Tuesday Form 271] So let`s just say that your home is sold within the 30-day Holdover period. As always, I recommend that buyers and sellers call on a registered real estate professional to assist with every real estate transaction and a real estate lawyer to provide legal assistance in this process. The lawyer should check your list arrangement before signing it. #2. Negotiate a slippery ladder for raising the Holdover pension. For example, instead of a 200% increase in rents from now on, tenants can request an increase to 125% in the first month, 150% in the second month, etc.
Suppose a tenant paid a gross rent of $12 per square metre per year, when the lease ended on an area of 5000 square metres. If the tenant decides to exercise the Holdover clause and stay in the space without signing a new lease, the new rent could be $18 or even $24 per square metre. However, a detention agreement without a properly planned written occupancy agreement raises questions about the buyer`s ability to protect his or her interest in the newly acquired property. What happens if the selling tenant loses interest in the maintenance of the property, is wasted for no reason, refuses to pay rent or does not move on the agreed date? It is not clear if you intend to continue selling your property, so let me explain how the Holdover clause may affect you after the current list contract expires.