February 12th, 2024 at 5:10 pm
Answer: No, that’s not a good idea in my opinion. If you give the buyer both forms, and it’s the buyer, not you, who decides to use the SIP, that’s fine. Just be sure to inform the buyer in writing (and get the buyer’s written acknowledgement of receipt), that your suggestion is for the buyer to use the RLAS instead, and that you strongly encourage the buyer to consult with the buyer’s own attorney concerning this matter as the buyer deems fit.
We don’t know exactly how these situations will play out, but my guess is that a buyer is generally better off using an RLAS, rather than SIP. Buyers usually worry about sellers not leaving when the time comes, even though that rarely occurs. If that does occur, the legal process for a lease situation is for the buyer and buyer’s attorney to file an unlawful detainer (UD) action to evict the seller. The law requires UD actions to be processed in an expedited manner in Superior Court.
The SIP, however, is not a “lease” agreement, but a “license” agreement. It even says on the SIP form that the buyer should “consult with a qualified local landlord attorney to discuss whether the possession could be interpreted as creating a landlord-tenant relationship between Buyer and Seller.”
We do not know for any given circumstance whether a buyer with an SIP would want to, or be able to, go for the faster-paced UD action. But California law is very protective of tenants’ rights. If I were the buyer, I would not take the chance of using an SIP for a 32-day leaseback. Depending on the local laws and what my own UD attorney says, I might even opt for an RLAS, rather than SIP, for a short-term occupancy of less than 30 days.
-Thank you to Jeanette Amen (La Jolla Office) for suggesting this week’s legal tip!
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