Possession
Physical occupancy and control of a property. The date the buyer actually takes it can differ from the closing date, so a purchase agreement states when the seller must move out and hand over the keys.
Key Takeaways
- Possession is physical occupancy and control of the property, which is a separate question from who holds legal title.
- The possession date and the closing date are set independently in the purchase and sale agreement, and they are often not the same day.
- Closing transfers ownership; only the possession clause decides when the keys change hands and on what terms.
- In Washington, a buyer occupying the home before closing under the purchase agreement is exempt from the Residential Landlord-Tenant Act (RCW 59.18.040(2)).
What It Means
Possession is the physical side of a real estate transaction: who is in the building, holding the keys, storing furniture there, and controlling who else gets in. Ownership is the legal side, and the two do not have to change hands on the same day.
The Closing Date is when the deed records and the buyer becomes the owner. The possession date is whatever the Purchase And Sale Agreement says it is, down to the hour. Sellers routinely need a few days after closing to finish moving out, and buyers sometimes want in beforehand to start work. Either gap has to be written down, because for that stretch the person living in the property is not the person who owns it.
A written possession arrangement should set the exact date and time, a daily rate if one party is paying the other, who carries insurance, who pays utilities, what condition the property must be in at handover, and what happens if the occupant does not leave on schedule. Silence on any of those points is where the arguments start. Related reading: Navigating Earnest Money and Contingencies in Washington Real Estate.
How It Works in Washington
In Washington, the possession date comes from the contract rather than from a statute in an ordinary sale, so the drafting is the protection. One exception matters on the exam: RCW 61.24.060 gives the purchaser at a trustee's sale the right to possession on the twentieth day following the sale, and no contract sets that clock.
Early buyer occupancy has its own Washington wrinkle. RCW 59.18.040(2) exempts from the Residential Landlord-Tenant Act any occupancy under a bona fide Earnest Money agreement to purchase, or contract of sale of the dwelling unit, where the occupant is or stands in the place of the purchaser. A buyer who moves in before closing under the purchase agreement is therefore not a residential tenant under that chapter, and the written occupancy agreement, not the landlord-tenant statute, supplies the terms.
A Rent Back runs the other direction, with the seller staying on after the deed records. Because ownership has already moved, the terms belong in writing and signed before the keys do, including the daily rate, the hard move-out time, and the remedy if that time passes.
Example
Priya and Tom are selling their Tacoma house to Alan. Recording is set for Friday, March 13, but they cannot get into their new place until the weekend, so the agreement gives them possession through 5:00 p.m. on Sunday, March 15, at $95 per day for the two days after closing. That $190 is credited to Alan at closing, and the agreement charges $250 per day if they are still in the house on Monday morning.
Alan owns the house from the moment the deed records on March 13, and his homeowner policy starts that day even though Priya and Tom are still living in it. Priya and Tom keep the utilities in their names through March 15. When they hand over the keys Sunday afternoon, Alan walks the house before signing off, because the agreement requires the property to be in the same condition it was in at the inspection.
Common Mistakes and Exam Traps
- Possession and title are different. A buyer can own the property on paper while the seller is still lawfully living in it under a signed rent-back.
- The closing date in a purchase agreement does not automatically set the possession date. A separate clause does, and it can name a different day and time.
- Adverse possession is a doctrine about acquiring title through long occupancy. It has nothing to do with the possession clause in a purchase and sale agreement.
- After a nonjudicial foreclosure in Washington the possession date comes from statute, not from a contract: the trustee's sale purchaser is entitled to possession on the twentieth day after the sale (RCW 61.24.060).
Where you'll learn this
Frequently Asked Questions
What is the difference between the closing date and the possession date?
Closing is when the deed records and ownership transfers. Possession is when the occupant moves out and the keys change hands. The purchase and sale agreement sets each one separately, and they are frequently different days.
Can a buyer move in before closing?
Yes, with a written early occupancy agreement. In Washington, occupancy under the purchase agreement by someone who is or stands in the place of the purchaser is exempt from the Residential Landlord-Tenant Act (RCW 59.18.040(2)), so the written agreement rather than the landlord-tenant statute supplies the terms.
Who pays utilities and carries insurance between closing and possession?
Nothing assigns them by default, which is exactly why the agreement has to say. Spell out who keeps the utilities on, who carries the policy on the building, and who is responsible for damage during the gap.