Key Elements of an Addendum
- Dates. Include and differentiate between the date the early occupancy begins and the start date of the original lease.
- Early occupancy payment. Be clear about the payment amount, how it’s calculated, and when it’s due.
- Deposit. Specify whether the security deposit gets paid before the occupancy begins or before the lease start date.
- Lease terms. State whether the terms of the lease will apply during early occupancy.
How to Charge for Early Occupancy
There are several ways to charge for early occupancy. These are the most common:
- Prorated rent. Divide the monthly rent by the number of days in the month, then multiply that by the number of days the tenant will be occupying the property.
- Day rate. This is a good option if the move-in date might change. The rate can be fixed, or it can be calculated using the formula for prorated rent.
- Fixed fee. This method does not depend on the number of days the tenant occupies the property, making it useful in flexible arrangements.
- No payment. Some landlords use a free early occupancy as a means of making their property more attractive to renters.
How to Use an Early Occupancy Addendum (5 steps)
4. Inspect Property
What Happens If the Tenant Doesn’t Pay?
A breach of an addendum gets treated like a breach of a lease, and state law dictates what this looks like. A breach can incur late fees, prompt a notice to pay or quit, or justify an eviction. One way to reduce the risk of nonpayment is to collect the early occupancy payment before the tenant moves in, provided it’s under the rent limit set by state law.
Do Tenant Protections Apply?
In a word, yes. Tenants who move in before the lease’s start date generally have the same legal protection they do during the lease period. This means landlords are responsible for ensuring the property is livable and following state law in eviction proceedings.
Addendum vs. Changing Lease Start Date
Using an addendum avoids redrafting, re-signing, and perhaps even re-notarizing a lease. If, however, the lease hasn’t been signed, drafting a new lease agreement is perhaps simpler.
Early Occupancy When Buying a House
A lease addendum adds to the terms of an existing lease, allowing a tenant or renter to move in before the lease begins. An early occupancy agreement, also known as a use and occupancy agreement–U&O, for short–is different. This document sets the stage for buyers to move in before closing, or sellers to move out after closing.
| Early Occupancy Addendum | Use and Occupancy (U&O) Agreement | |
| Used by | Tenants and landlords | Homebuyers and sellers |
| Used with | Lease agreement | Purchase agreement |
| Relationship | Part of a landlord-tenant relationship | Does not necessarily establish a landlord-tenant relationship |
| Timing | Covers period before the lease start date | Can refer to buyer occupying before closing or seller occupying after closing |
Sample
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