Early possession in the sale of a property occurs when a vendor, being the owner of the property, allows a purchaser access to the property prior to settlement.  There can be various reasons why a purchaser may request early possession.  The purchaser may have sold their property, or they may need to vacate their residence earlier than expected.  The purchaser may also wish to gain a head start on moving by storing items in the property if the whole or a portion of the property is vacant.

In terms of the advantages of early possession, it is the purchaser who primarily benefits as early possession provides relief for housing or storage issues the purchaser may be experiencing.  There may be some advantages for the vendor.  Such as, if the property is vacant it may be beneficial to have someone residing in the property to reduce the risk of a break-in and vandalism.  Early possession can also create additional income through an early possession fee.  Whilst there are some benefits for vendors, allowing early possession comes with risks.

If the vendor grants the purchaser access to the property prior to settlement, the purchaser is obtaining the benefit of the property whilst the vendor must wait until settlement to receive the settlement monies.  This is because, at settlement the title to the property passes from the vendor to the purchaser when the purchaser pays the settlement monies to the vendor.  The risk is, if settlement does not go as planned, the vendor may experience the added stress, delay and cost of taking action to have the purchaser and their belongings removed from the property.  The vendor may also need to deal with repairing damage caused by the purchaser.

Every sale is unique and involves vendors and purchasers who have different needs and goals.  Early possession is just another consideration to the transaction.  Before you agree to granting a purchaser early possession of your property, it is strongly recommended you seek legal advice.  This is to ensure you fully understand the risks but also to ensure the terms of early possession are clearly outlined and agreed to by all parties.

For efficient and expert advice, contact Everingham Solomons where Helping You Is Our Business.

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