??? WHEN ARE YOU IN POSSESSION OF THE PROPERTY ???
You have a firm anticipated closing date. You begin to coordinate with third parties such as staff, maintenance workers, a management company, accountant etc… You schedule parties to be present at the property on the morning of the closing day. You instruct them to perform some minor duties at the property, such as cleaning out some trash from a vacated unit. Later in the day you check in with the Title Company and your legal counsel as to the status of closing. You are informed that your wire did not arrive to the Title Company prior to the wire cutoff time. The Title Company is unable to close and fund the transaction that day because they can no longer wire funds.
What does that mean? The premise of the contract is an exchange of money for a property. As the Title Company is unable to fund the seller on the intended closing date, it means that the seller is still in possession of this property. Until the seller receives possession of the funds from the sale of the property, the buyer is not in possession of the property.
Taking this scenario one step further, the worker, hired by you to clean out the trash, fell and broke his arm on the property. He reported the incident to you and later he hired an attorney. The attorney will sue the employer and the owner of the property which on the date of incident was not You. A liability situation has been created because the worker was on the property and he was not employed by the current owner on the day that the incident occurred.
How can this situation or similar situations like this be avoided?
Our firm always recommends to a buyer that they wait to deploy any third parties to the property until they have received a Congratulatory email from our office indicating in writing that they are now in possession of the property and they may take over. This may happen after 5:00 p.m. if the closing is down to the last minute, it may happen on the following day as closing rolled into the following day. It could even happen on a Monday after an intended closing that should have occurred on Friday.
Best advice that our firm can provide is to make sure that you know, in writing, you are in possession of the property. Remember, You give the Seller Money, the Seller gives you a Property.