Posted by Melissa on March 07, 2001 at 09:40:26:
I have never had this happen. Generally, the utilities are never shut off. Only transferred. Ask the seller to have the utilities transferred to you as opposed to being shut off. If the seller is so concerned about the exact numbers, he or she should call in the numbers on his own. The utility companies are going to estimate it anyway no matter when you have the service shut off or transferred.
I would hope you have a good enough relationship with the seller that you could work this issue out.
1st Deal - Posted by Patrick Harper
Posted by Patrick Harper on March 05, 2001 at 19:42:14:
Hello Out there, I’m about to close on my 1st investment property and have a few questions for anyone out there. 1. Should I wait till the day after closing to change over gas/electric/sewer/water to my name or do day before. 2. What do you think about going directly to Necac for a lessor before putting an ad out on the open market? 3. And if closing is pushed back, and I get premission to go into the home and start working on it, what things can I do to protect myself?
Re: 1st Deal - Posted by Melissa
Posted by Melissa on March 06, 2001 at 17:25:07:
A clause that allows you to advertise and show the property before the closing is OK. You can clean the place up and promise new appliances or paint, but don’t start any work prior to closing. If you find a good Tenant, schedule the move in a couple weeks after the closing in the event of a delay (this will also give you time to do work), but have a clause that allows you to give them credit if there is a delay in posession and allows them a refund in the event you cannot give them possesion in the worst case scenario.
e.g. 4. Possession: If there is a delay in delivery of possession by Lessor, rent shall be abated on a daily basis until possession is granted. If possession is not granted within (10) ten days after the beginning day of the initial term, then Tenant may void this Lease and have full refund of any deposit. Lessor shall not be liable for damages for delay in possession. It is understood that decorating, if any, to be performed by Lessor shall not be a condition precedent to possession or rent.
You never know what sorts of issues may come up to prevent a closing, but in my experience, 90% close without an issue, but the other 10% could really be bad news if you started work and have already created expenses for yourself. Some deals never close, then what would you do.
As far as the utilities, if the place is vacant, the sales contract should require the seller to keep utilities on until the sale closes, if you’re worried about it. After the closing, then transfer the utilities.
Re: 1st Deal - Posted by Brent_IL
Posted by Brent_IL on March 06, 2001 at 21:57:52:
My contract says seller is responsible to keep utilities on for 5 days after closing.
What I’m trying to avoid is the seller scheduling cut-off at 4:00 PM on Friday afternoon, to match our scheduled 4:00 closing. By the time I get the utilities back on the pipes have frozen, and burst, or someone trips because the lights wouldn’t work.
I can switch the account the next day. No one has ever questioned it.