Real estate pre-possession means that the buyer or tenant are allowed access to the real property before the sale is closed or the lease begins.
There are pros and cons to a seller or landlord allowing real estate pre-possession.
Pros of Real Estate Pre-Possession
Probably the biggest pro of allowing a real estate pre-possession is that it creates a good working relationship between the two parties.
If you’re selling a property, allowing pre-possession can help keep the deal on track.
If you’re a leasing property manager or owner, allowing the tenant early access to take measurements and get bids from contractors can establish a good landlord-tenant relationship right from the start.
Cons of Allowing Pre-Possession of Real Estate
There are also some drawbacks to allowing a buyer or tenant early access to the property.
In the case of a real estate buyer, they may be secretly looking for a reason to cancel the purchase agreement.
Maybe they’re having second thoughts about buying your property. Or maybe they found a better deal somewhere else.
If that’s the case a buyer will try to come up with an issue they claim was never disclosed to them.
Sometimes they will try this move even if all of the contract contingencies have been removed. The threat of non-disclosure can create big problems for the seller both before and after close of escrow.
Allowing tenants pre-possession can also create potential problems for the property manager or landlord.
One of the biggest risks is that the tenant underestimates the cost of its tenant improvement. Or they realize the cost of making their space move-in ready is more than they anticipated.
A tenant who has second thoughts will then try to raise all sorts of issues with the landlord.
They will try to turn minor issues into big ones. This virtually guaranties the tenant will be a problem to deal with.
Often times over the entire term of the lease!