In recent years, pre-ownership agreements have gained some notoriety in the residential real estate sector, and rightly so. There are several potential dangers associated with such agreements, and if they go wrong, they do it wrong. More than one “horror story” of residential real estate can be attributed to a pre-trial agreement that went wrong. Hence the reason for the Commissioner`s settlement on this issue. 6. on-site insurance; The seller`s insurance can no longer be effective in the case of buyer occupancy. Pre-proxion agreements (and post-ownership agreements)1 may serve a valid purpose to the buyer and seller, but they must be executed with great care. Below is a general discussion on pre-ownership agreements and things to consider. The Real Estate Commissioner`s rules contain the following warnings to real estate licensees regarding the so-called “pre-ownership” and “post-property” occupancy contracts: it is appropriate for you, a buyer and a seller may authorize the buyer to own the house before the registration deadline. However, a pre-detained agreement carries many risks that the parties should carefully consider. There is also the possibility of damage to the property during the buyer`s occupation before closing. Whether such damage is caused by the buyer is who is taking the risk. First, they must decide whether they want a “pre-proposal contract” or a “lease” under the Arizona Residential Landlord and Tenant Act: 1.

authorizing or facilitating the occupancy of a property by a third party without the person`s prior written permission; or rent and security. If the buyer rents for use of the premises before closing, the exact amount must be indicated in the agreement (either as a daily, weekly or monthly basis, or a package). Sellers should receive a deposit as with any other type of rental. The best protection for the seller is to sign the agreement in writing. The seller can also get some protection by getting a sufficient deposit to cover the rent (both expected and unforeseen) and damage to the property. This agreement is a simple and simple rental agreement, despite its “pre-possession contract” name.