By Nikki Salgat, Esq., Arizona REALTORS® Assistant General Counsel

AAR’s Risk Management Committee (“Committee”) has previously avoided developing pre-possession and post-possession agreement forms due to the inherent risk and liability associated with transactions of this nature.

However, the Committee recognizes that these type of agreements are entered into. As a way of minimizing risk, it approved providing pre- and post-possession agreement checklists to Arizona REALTOR® members, so they may address important issues.

Such issues include but are not limited to: insurance; condition of premises at time of possession; repairs and maintenance; occupancy rights; rental payments and/or deposits; contract contingencies; alterations and a failed transaction.

To access the Pre-possession Agreement Checklist, click here and for the Post-possession Agreement Checklist, click here.

Note: Due to risk and liability involved with pre-possession and post-possession of a property, the best practice is for the parties not to enter into a pre-possession or post-possession agreement.

However, if the parties insist on entering into such an agreement, the real estate agent should consult with his or her broker. Moreover, the Arizona Department of Real Estate’s rule R4-28-1101.K states:

A salesperson or broker shall recommend to a client that the client seek appropriate counsel from insurance, legal, tax, and accounting professionals regarding the risks of pre-possession or post possession of a property.

For more information on pre-possession and post-possession agreements, click here.

Nikki Salgat, Esq. is a licensed Arizona attorney and Assistant General Counsel for the Arizona Association of REALTORS®. This article is of a general nature and reflects only the opinion of the author at the time it was drafted. It is not intended as definitive legal advice, and you should not act upon it without seeking independent legal counsel.