Can I request early possession before closing?
Can I request early possession before closing? Read this first — the legal, practical, and local truth for Georgetown sellers.
Quick answer
Yes — buyers can request early possession before closing, and sellers can agree, but it’s risky without airtight paperwork. In Georgetown, ON, an early possession (interim occupancy) agreement is common. But one wrong clause and you lose money, time, and the leverage that made you the seller.
Why this matters for Georgetown home sellers
Georgetown sits at the edge of the Greater Toronto Area. Buyers want flexibility. They want to move in early, line up school registrations, or get to work. As a seller, saying yes can speed the sale. Saying yes without protections can expose you to liability, damage, and money left on the table.
This article tells you exactly what to demand, how to protect your equity, and how closing and moving logistics change when someone asks for early possession in Georgetown, Ontario.
What is early possession (interim occupancy)?
Early possession — sometimes called interim occupancy or pre-possession — lets the buyer occupy the property before the legal transfer of title and payment of full purchase funds. The buyer moves in; title usually still belongs to the seller until closing is completed and registration is done.
That makes it a legal grey zone without the right contract.
The legal baseline in Ontario
- Early possession is legal if both parties sign a clear interim occupancy agreement. Without it, possession before closing is a huge risk.
- The agreement should cover occupancy fees, insurance, utilities, repairs, indemnities, responsibility for property damage, and what happens if the sale fails.
- Lawyers must be involved. Documents that vary from standard agreements should be reviewed and registered where required.
Georgetown-specific realities you must know
- Local market pressure: When inventory is tight, buyers push for early possession to align moving dates and avoid double moves. Sellers feel pressure to concede.
- Commute and timing: Many Georgetown buyers work in the GTA and time moves around start dates, school, and transit changes. That increases the frequency of early possession requests.
- Smaller community, faster word of mouth: Any dispute or damage is noticed quickly, which can affect reputation and resale value nearby.
Because of those factors, local buyers and sellers often accept early possession — but Georgetown sellers must be stricter on paperwork.
Biggest risks for sellers agreeing to early possession
- Loss of legal title: You still own the property, but physical control is gone. If the buyer defaults before closing, reclaiming the property can be expensive and slow.
- Damage and wear: Normal wear, accidental damage, or deliberate changes can drop sale value or cost you repairs.
- Insurance gaps: Your home insurance may not cover a buyer living in the house. The buyer’s insurance may not cover your title-related risks.
- Mortgage and lender rules: Your mortgage lender may object to interim occupancy. You could be in breach of your mortgage terms.
- Risk if buyer doesn’t close: If the buyer fails to close, you must enforce remedies. Evicting someone who moved in is harder and costlier than returning keys.
- Tax and municipal adjustments: Utilities, property taxes, and other adjustments need clear timing. Mistakes cost money.
How to protect yourself — the exact clauses you must insist on
When a buyer asks for early possession, do not say yes until these clauses are in writing and reviewed by your real estate lawyer:
- Interim Occupancy Fee (IOF): The buyer pays a daily/monthly occupancy fee (often tied to mortgage, taxes, utilities) from possession date until closing and registration. Set it higher than their expected costs — you are giving flexibility, don’t give away value.
- Security Deposit / Holdback: Require a holdback or deposit (escrow) with the seller’s lawyer. This covers damage, unpaid fees, and default remedies.
- Insurance Proof: Buyer must provide proof of comprehensive home insurance naming the seller as additional insured or demonstrating equivalent protection from the possession date.
- Indemnity Clause: Buyer indemnifies seller against claims arising from buyer’s occupation, including injury, damage, or legal costs.
- Condition Report & Photos: Do a detailed walk-through with time-stamped photos and a signed condition report. List existing damage and appliance states.
- Repairs and Alterations: Prohibit major alterations without seller consent. Define responsibility for small repairs and what constitutes damage.
- Termination and Default Remedies: Clear, fast remedies if buyer doesn’t close — eviction terms, fee penalties, forfeiture of deposit.
- Utility Transfers & Meter Readings: Require meter readings day of occupation and day of closing. Buyer pays utilities from possession date, documented.
- Access for Inspections and Appointments: Seller retains right to access for agreed inspections or showings if contract allows, with notice.
- Lawyer Involvement: All funds and documents go through lawyers. No handshake deals.
Practical checklist for sellers (do this before handing over keys)
- Tell your listing agent to stop informal promises. No verbal agreements.
- Speak to your lawyer immediately.
- Insist on an interim occupancy agreement before possession.
- Get an occupancy fee and secure a minimum deposit.
- Take photos and make a condition report.
- Verify buyer’s insurance and that seller remains protected.
- Read your mortgage and lender clauses. Get lender consent if needed.
- Schedule final cleaning, keys, and appliance inventory on a specific day.
- Keep a buffer: don’t allow occupancy more than necessary.
- Set a clear final possession date tied to closing and registration.
How to set a fair occupancy fee in Georgetown
Charge enough to offset your exposure. A rule of thumb: occupancy fee = your current monthly mortgage + 10–20% + prorated property taxes/utility shares. That ensures you’re not covering costs while someone else uses the home. Always compute with your lawyer for exact numbers.
What if the buyer asks and you want to refuse?
You can refuse. The buyer may negotiate elsewhere. Refusing keeps your leverage: you retain physical control and reduce risk. If you refuse politely but firmly, your sale still proceeds as long as the buyer accepts typical closing timelines.
Negotiating tactics that protect value (use these)
- Trade early possession for money and proof: demand a larger deposit or higher occupancy fee.
- Shorten the occupancy period: tie possession tightly to closing date.
- Seller access clause: keep right to re-enter for repairs, inspections, or emergencies.
- Escalate penalties: make default too costly to risk.
- Insist on lawyer escrow: no direct cash exchanges.
Moving logistics when early possession is agreed
- Coordinate movers around possession date, not closing date.
- Leave a clear inventory and keys list.
- Keep certain items out: valuable fixtures or personal paperwork should be moved out before the buyer moves in.
- Transfer utilities on agreed dates with proof.
- Confirm final walkthrough and meter readings on handover day.
Common scenarios in Georgetown and how to handle them
- Buyer needs keys a week early for school/work: Accept only with an interim agreement, deposit, and insurance proof.
- Buyer moves in before closing and fails to close: Eviction can take weeks. If you planned with a holdback and indemnity, you recover most losses quickly.
- Damage occurs: Condition report + photos + deposit = fast repair funds. Without them you’ll fight in court.
Final take: act like a seller with leverage
Early possession is a convenience. Never accept it for free. You are selling a legal property — not a favor. Use paperwork to convert flexibility into cash and protection. If a buyer wants early possession, make them pay for the privilege and prove they’re responsible.
Why use a local expert
Georgetown’s market dynamics and municipal rules make a difference. Local lawyers, agents, and insurers know the right language to protect you. A good local Realtor recognizes red flags early and negotiates strong interim occupancy terms that protect equity and timelines.
FAQ — Closing, possession, and moving in Georgetown, ON
Can a buyer legally move in before closing in Ontario?
Yes — if both parties sign an interim occupancy agreement. No agreement equals serious risk for the seller.
Who is responsible for insurance during early possession?
The buyer should obtain their own homeowners insurance immediately and add the seller as an additional insured for the occupation period. Confirm with your lawyer and your insurer.
What happens if the buyer doesn’t close after moving in?
You enforce remedies in the interim occupancy agreement: keep the deposit, charge occupancy fees, and pursue eviction and damages. Evictions and legal enforcement cost time and money, so plan for quick remedies.
Can my mortgage lender stop early possession?
Possibly. Some lenders require notification or refuse interim occupancy. Check your mortgage terms and get lender consent if required.
How long can early possession last?
Any length you agree to. Shorter is safer. Many sellers limit it to days or a few weeks tied to the closing date.
Do I need a lawyer for early possession?
Yes. A lawyer drafts and holds funds, verifies insurance, and ensures enforceable remedies. No lawyer, no keys.
Can I demand a higher price for allowing early possession?
Yes. You can trade early possession for money (deposit, higher price, or higher occupancy fee). Treat early possession as a negotiable asset.
What if the buyer damages the property?
Use the condition report and deposit to cover repairs. If costs exceed the deposit, pursue the buyer legally. Proper documentation accelerates recovery.
If someone asks you for early possession, call a local expert before you say yes. I’m Tony Sousa — I help Georgetown sellers negotiate safe, profitable closings and move timelines. Call or email for a fast review of any request for early possession and a customizable interim occupancy agreement.
Tony Sousa | Local Realtor, Georgetown, ON
Email: tony@sousasells.ca
Phone: 416-477-2620
Website: https://www.sousasells.ca
Need help now? Send the possession request and the draft agreement and I’ll review it with you and your lawyer.
