[SOLVED] Rent-Back Agreement After Close — What to Include to Protect Yourself

Here’s my standard list for rent-backs:

Daily rent rate — Set at or above the buyer’s daily PITI cost. Sellers sometimes want to pay below market because “it’s only 30 days.” Buyers are now landlords paying a mortgage; they shouldn’t be subsidizing the seller’s extra month.

Security deposit — Minimum one month’s rent held in escrow, not paid directly to buyer. Released after move-out inspection confirms no damage.

Holdover penalties — What happens if seller doesn’t leave by day 30? The clause needs teeth: 2-3x daily rate for each day over, plus right to pursue eviction. Without this, you have no leverage if they drag their feet.

Insurance provision — Seller should maintain renter’s insurance covering their personal property. Buyer’s homeowner’s policy may not cover a tenant’s belongings or liability.

Move-out inspection procedure — Specific date and process for inspection. Don’t leave it vague.

Dave’s list is solid. One thing I’d add from personal experience: get the buyer’s lender involved early if there’s any chance the buyer is getting an owner-occupant loan. Some lenders have restrictions on rent-backs — specifically around the length of occupancy before buyer takes possession. A 30-day rent-back on an FHA loan, for example, can create occupancy certification issues if not handled correctly. Check with the lender before agreeing to terms, not after the seller has already been told yes.

This is exactly what I needed. The holdover penalty clause was the one thing I knew was missing from our draft. Lisa’s lender point is critical — this is a conventional loan so we’re okay, but I’ve flagged it as a checklist item for future transactions. Marking solved. Thanks both.