An interim occupancy agreement, also known as an interim occupancy period, is a legal document that outlines the terms and conditions of a temporary occupancy arrangement between a buyer and a developer. This type of agreement is typically used in pre-construction or new construction real estate transactions.
During the interim occupancy period, the buyer is allowed to occupy the unit before the completion of the construction and the transfer of the title. The developer may require the buyer to pay interim occupancy fees, which can include taxes, maintenance fees, and utilities. The buyer may also be required to provide insurance coverage for their temporary occupancy.
Interim occupancy agreements typically specify a set period for the interim occupancy period, which can vary depending on the construction schedule and other factors. After the completion of the construction, the title is transferred to the buyer, and they become the legal owner of the property.
It is important to note that an interim occupancy agreement is not the same as closing on the property. The buyer cannot obtain a mortgage or sell the property during the interim occupancy period. Interim occupancy agreements are also subject to local laws and regulations, which can vary from state to state.
In some cases, an interim occupancy agreement may be necessary due to delays in the construction process. For example, if the developer encounters unexpected challenges during construction, such as weather-related delays or supply chain disruptions, they may need to delay the completion of the project. In these cases, an interim occupancy agreement can give the buyer the option to move into the unit temporarily while the construction is completed.
Overall, an interim occupancy agreement can be an important tool for buyers and developers in new construction or pre-construction real estate transactions. It allows buyers to occupy the unit temporarily before the transfer of title, while giving developers flexibility in the construction process. However, it is important for all parties involved to carefully review the terms and conditions of the agreement to ensure that they are fully understood and agreed upon.