A Mesa homeowner signs a purchase contract that includes a provision allowing the seller to remain in the property for 30 days after closing as a tenant. The provision specifies daily rent and security deposit requirements. What type of provision is this?
Correct Answer
A) Leaseback provision
A leaseback provision (also called seller rent-back) allows the seller to remain in the property as a tenant after closing, typically for a specified period with defined rental terms. Option B is incorrect because right of first refusal gives someone the opportunity to purchase before others. Option C is incorrect because this is not a contingency that must be satisfied for the contract to proceed. Option D is incorrect because acceleration clauses relate to loan payment acceleration, not post-closing occupancy.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Novation is the substitution of a new contract for an existing one, or the replacement of one party with a new party, with the consent of all parties involved. The original party is completely released from all obligations.
Offer and acceptance is the process by which one party proposes specific terms for a contract and the other party agrees to those exact terms, creating mutual assent. This mutual agreement, also called a meeting of the minds, is an essential element of every valid contract.
An option contract gives one party the exclusive right, but not the obligation, to purchase or lease a property at a specified price within a specified time period. The buyer pays option consideration to keep the option open.
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