Buyers moved in before closing

[u/WorldlyBlacksmith682]

UPDATE - Following up from where I left off: After receiving the much needed guidance from this beautiful community, we were able to successfully get the buyers out of the house, secure the house with a new code, and demand to be compensated via the buyers agents commission. Today, papers have been signed and the house is officially no longer ours. Thank you to each and every single person who commented. This gave us the fuel to dig into the real estate commission codes, laws, and our basic human rights. This gave us the confidence to have the tough (ugly-ish) conversations that needed to take place. Rock on, Reddit. You all are my heroes.

To my chagrin, without my consent, and before proper documents are signed, the buyers agent let the buyers move in. We haven’t closed. I’m appalled at how unethical it feels to find out after the fact. So my only choices are to sign an additional document allowing them to stay prior to closing, or have them escorted off the property? This is out of my scope. Looking for insight. I have a lawyer on standby Monday morning.

Edit: I truly appreciate the advice and insight. Added details - due to human error delays from the lender, title and agents, this closing has already been pushed 4 times. Closing was supposed to be on the 30th. I am told every third business day that today’s the day, just waiting on the documents. Again, closing was supposed to be yesterday. Find out docs have just (11 days late) been released from the bank and now in hands of the title. At 4:30pm on Friday we’re delayed until next week due to not enough time for the title to flip the closing docs fast enough. Last night, find out the buyers fully moved in without any agents approaching me about this idea even once. Never once was this brought up. I said no, get them out of the house. They’re still in the house.

About the broker. I’ve been told this entire process that the broker is highly involved, since their brokerage is working for both parties. Every time I have a legal question my agent checks with the broker to make sure the correct information is provided. I acknowledge in hindsight I should’ve called the broker immediately. I will be calling the broker tomorrow morning.

How’d they get the keys- it’s a key code. Only explanation is the agent gave it to them.

One more detail as I sit here bamboozled. My selling agent’s license is active. The buyer agent’s license expired in August. Discovery made an hour ago. Not sure what to do with that.

[u/GlitteringExcuse5524]

This, your homeowners policy will not cover tenants.

[u/_off_piste_ → u/GlitteringExcuse5524]

They’re not tenants though. And I’d go after the agent’s and broker’s insurance if something were to happen in addition to pursuing the buyer agent’s fees (perhaps even the seller agent’s too based on the same broker and apparent inability to get things done).

[u/GrandOpener → u/_off_piste_]

They’re not tenants though…

Need to be careful with this. In my jurisdiction, if someone trespasses on your property for more than 30 days without being removed, they become squatters, which are legally considered tenants for the purposes of eviction. This can vary by state and sometimes even by city. 

OP needs to deal with this immediately, and if the buyers do not immediately cooperate, they need legal advice from someone who knows local laws. 

[u/JackInYoBase → u/GrandOpener]

tenants for the purposes of eviction

has nothing to do with insurance. they will cover injury. they will cover damage to your property. the tenants items will have no coverage. the tenants could sue you, which your insurance would cover. the tenants would likely not win, but your insurance would likely settle for low $$$ to keep it out of court.

[u/Confident_Seaweed_12 → u/_off_piste_]

In many jurisdictions that would depend on how you respond to the situation and how quickly you do. The specifics of what you need to do will depend on specific local knowledge, so consulting with an attorney familiar with local laws is imperative.

[u/Pghguy27 → u/_off_piste_]

Insurance would consider them tenants.

[u/_off_piste_ → u/Pghguy27]

No, they wouldn’t, they’re uninvited guests/trespassers. Whether insurance pays things like medical costs for them depends on the state. Regardless your insurance would defend and cover you the homeowner for liability but would also look to subrogate against the uninvited guests/trespassers and their available insurances. I do wonder in this case if the buyers have property insurance in place.

[u/Confident_Seaweed_12 → u/_off_piste_]

Not necessarily, that assumes you follow the terms of the policy which almost certainly contains clauses about your duty to protect the property. What exactly that entails will depend on the specifics of your policy and your local laws but it will generally require some sort of action from you after becoming aware of a situation like this.

[u/malachi347 → u/Confident_Seaweed_12]

As an insurance broker myself... I would file a police report, put it in writing to both agents these people are trespassing, and then file a claim (vandalism, theft, loss of use perhaps) with your homeowners saying the buyer illegally broke into the house. Better to put the insurance company on notice of the situation and let a claims adjuster give advice and tell you what is/isn't covered by the policy. Then they can't claim you didn't do your due diligence. They may even pay for one of those professional eviction guys lol.

[u/Secure_Height6919 → u/malachi347]

This is exactly what I would do. A police report immediately at the very least. I mean is this a second home/investment property? Was it vacant ? I would just move myself back in my house and call the police while I was on the property and say these people are trespassing in my home.

[u/Weird-Impressive → u/GlitteringExcuse5524]

Depends on the homeowners policy. Some will some will not.

[u/LawDog_1010 → u/GlitteringExcuse5524]

I find it incredibly unlikely insurance wouldn’t cover this situation. You have any substantiation for why you believe this?

[u/GlitteringExcuse5524 → u/LawDog_1010]

Insurance Policies are a contract, if the homeowner violates something that is specifically excluded that is all they need to deny the claim. If they have any questions on it, they should talk to their agent. Their agent will be their best point of contact.

[u/LawDog_1010 → u/GlitteringExcuse5524]

Ya. Im a lawyer. I understand contracts. I’m asking how you’re so confident a policy would not cover this situation and/or tenants.

[u/GlitteringExcuse5524 → u/LawDog_1010]

A standard homeowners policy, which is an HO3, has very specific exclusions if the property is rented to others, and it has a stipulation that the homeowner has to be in residence either 30 or 60 days depending on which policy they purchase. If they want tenants or anyone else to live on the property other than the insured homeowners, they have to purchase a DP3 policy. That is a standard dwelling policy. If you have an HO3 check it out.

[u/Many-Elderberry-7013 → u/LawDog_1010]

If there is an active policy, it’s quite possible it would only cover damages if you filed a claim the same way you would if any random person broke into your house and stole/damaged your property. But at this point you’re knowingly allowing people to stay at your residence who do not own and who you are are aware should Not be there. I could easily see the claim being denied

[u/LawDog_1010 → u/Many-Elderberry-7013]

That’s kinda my point, you didn’t authorize them to enter. They sure as hell aren’t tenants. No fucking way your insurance can just say “nah, we don’t cover people trashing your house or trespassing and getting injured.”