Temporary Occupancy Agreement

The Basics

A Temporary Occupancy Agreement is a short-term arrangement that allows either the buyer or seller to stay in the home for a limited time after or before closing — with all terms clearly spelled out in writing. In Tennessee, this is common when:

• The seller needs to stay a few days after closing to move out
• The buyer wants early possession before closing (less common)

These situations need to be agreed upon by both parties and included in the contract or as an addendum.

Post-Closing Occupancy

• The most common scenario
• Buyer owns the home but allows the seller to remain for an agreed period
• The seller may pay a daily occupancy fee (like rent), or it may be offered as part of negotiations
• Typically limited to a few days
• Seller must maintain the condition of the property until vacated
• Buyer should have insurance coverage and protections in place

Pre-Closing Occupancy

• Less common, higher risk for both parties
• Buyer takes possession before they technically own the home
• Requires strong legal protections and clear terms (utilities, liability, etc.)
• If the deal falls through, it can become complicated — so most agents and brokers advise caution

Key Terms to Include

• Exact dates of occupancy
• Daily rental rate or compensation (if any)
• Security deposit, if applicable
• Responsibility for utilities, maintenance, and damage
• Insurance and liability agreements
• Agreement on property condition at move-out

These terms should always be in writing, often using the official Tennessee REALTORS® occupancy forms.