I see this more often than you’d think. Closing is Friday, the wire is teed up, and the seller calls their agent on Wednesday to say they need another week. In Connecticut, the answer is almost never “let’s figure it out at closing.” It is a separate document called a Use and Occupancy Agreement, and most buyers and sellers see one for the first time when their attorney slides it across the table. Here is what is usually in it, and why every line matters.
A properly drafted Use and Occupancy Agreement is a license, not a lease. That distinction matters in Connecticut because residential landlord-tenant law is heavily weighted toward the tenant. There are notice requirements, eviction procedures, and security deposit rules that kick in once a landlord-tenant relationship exists. If the seller stays past closing under a lease, the buyer has just become a landlord, with everything that comes with it. A license avoids that. It is a temporary, contractual permission to occupy that ends on a fixed date.
A good Use and Occupancy Agreement turns on four numbers. The vacating date is the hard deadline by which the seller must be out. The daily holdover charge is a per-day penalty that kicks in if the seller blows the deadline. The occupancy charge is what the seller pays the buyer for being there at all. A fixed sum is cleaner than a formula tied to mortgage interest and taxes. The escrow is money held back from the seller’s closing proceeds, sitting in the seller’s attorney’s account, that the buyer can reach if something goes wrong.
In my experience, the biggest blind spot is property damage during the holdover period. The buyer owns the house. The seller is still inside it. A burst pipe, a moving truck that takes out a doorframe, a kitchen fire, a scratched floor. Any of those happen on the buyer’s watch. A solid Use and Occupancy Agreement makes the seller responsible for damage and indemnifies the buyer for property and personal injury claims while the seller remains in possession. It also typically requires the seller to keep renter’s or homeowner’s insurance in force through the vacating date, with proof delivered at closing. Without those provisions, the buyer is potentially on the hook for problems the seller created.
One last point. Most residential loans require the buyer to occupy the property as a primary residence within a short window after closing. A brief Use and Occupancy is generally fine, but anything past a few weeks can put the loan in technical violation. The shorter and tighter the agreement, the cleaner the file.
The Bayer Bottom Line
- Closing day is not the time to invent terms for a post-closing possession deal. Get the agreement done while everyone is still motivated to be reasonable.
- A Use and Occupancy Agreement is a license, not a lease. Draft it that way to keep CT landlord-tenant law out of the deal.
- Four numbers carry the agreement: vacating date, daily holdover charge, occupancy charge, and escrow. Pin all four down.
- Damage during the holdover period is the buyer’s biggest exposure. The agreement must shift that risk to the seller, with insurance to back it up.
- A short, tight U&O keeps the buyer’s residential loan clean.