Should I Agree to a Leaseback in Illinois?

 Posted on March 27,2024 in Real Estate

A leaseback is when a homebuyer allows the seller to remain in the home for a certain period of time after closing. The seller generally pays rent to the buyer during this period. Agreeing to a leaseback creates a new landlord-tenant relationship between the buyer and the seller, with the seller becoming the buyer’s legal tenant. Sellers often request this arrangement when they are ready to sell but, for some reason, cannot completely vacate the residence before closing. There are some risks involved for both the buyer and the seller in a leaseback. If you are considering agreeing to a leaseback, it is important to consult an experienced Cook County real estate lawyer first.

What is the Risk to a Homebuyer in a Leaseback? 

There are a few risks to a homebuyer in a leaseback, including:

• Seller does not vacate- If the date the leaseback period was supposed to end comes around and the seller is still living in the residence, you may be forced to formally and legally evict them. The eviction process can take several months. If you are currently renting or have a buyer lined up for the home you are in now, this can create problems if you are then unable to move into your new home on time.
• Property damage - Once you have closed, the property is legally yours. There is some risk that the seller could cause damage to your new home while they are leasing the residence. Rather than refusing the sale or demanding that they fix it before you will close, you may have to sue them for repair costs. 
• Abandoned property - With the final walk-through over, there is no guarantee that the seller will take everything inside the home with them. Disposing of abandoned property can be costly. 

What is the Risk to a Seller in a Leaseback? 

Risks to the seller include:

• Being unable to vacate - Sellers often request a leaseback because their new home is not ready yet. There is some risk that your new home will still not be move-in ready at when the leaseback term ends. 
• Eviction - The buyer will become your landlord and could evict you for just cause, such as not vacating when the leaseback expires. 
• Liability for damages - You may become liable for any further damages that occur to the leaseback property. 

It is important for both buyers and sellers to consult a skilled lawyer before signing a leaseback agreement.  

Contact a Chicago, IL Real Estate Lawyer 

Whitacre & Stefanczuk LTD treats clients like family and is very active in the local Polish community. Our experienced Cook County, IL real estate attorneys will work to ensure that you are well-protected legally and financially when you buy or sell a home. Contact us at 773-622-6100 for a complimentary consultation. Mówimy po Polsku.