Seller in Possession of Property After Close of Escrow (SIP) Advisory and SIP Agreement, along with clear explanations.

đŸ”č GENERAL PURPOSE & USAGE

  1. What is the Seller in Possession (SIP) Advisory used for?

Explanation:
The SIP Advisory is used when a seller will remain in the property after the close of escrow, even for a short duration (typically under 30 days). It helps set clear expectations and liability coverage for both buyer and seller.

  1. Is the SIP Advisory required if the seller is only staying 1–2 days after COE?

Explanation:
Yes, even if it’s just 1–2 days, any post-closing occupancy should be documented with an SIP form. It provides protection for the buyer, the seller, and the agent.

  1. What is the difference between the SIP Advisory and the SIP Agreement?

Explanation:

  • SIP Advisory: Discloses risks and responsibilities involved when the seller remains post-COE.
  • SIP Agreement (Form SIP): A contractual agreement detailing the terms, rent (if any), security deposit, maintenance, and length of occupancy.
  1. How is the SIP form different from the Residential Lease After Sale (RLAS)?

Explanation:

  • Use SIP if seller stays less than 30 days.
  • Use RLAS if seller stays more than 30 days (because it triggers landlord-tenant law).

đŸ”č ZIPFORMS & DOCUMENT MANAGEMENT

  1. Where do I find the SIP Advisory and SIP Agreement in ZipForms?

Explanation:
Go to “Add Forms” > search ‘SIP’ in the CAR library. You’ll see:

  • SIP (Seller in Possession Agreement)
  • SIP Advisory
  1. Can I pre-fill SIP forms in a ZipForms template?

Explanation:
Yes. Use Transaction Templates to include SIP and pre-fill fields like broker info, rent amount, or occupancy dates (if common across REO/flip scenarios).

  1. Do both buyer and seller sign the SIP forms?

Explanation:
Yes. Both parties must sign:

  • The Advisory (to acknowledge understanding)
  • The SIP Agreement (to contractually agree to the terms)

đŸ”č LEGAL, DISCLOSURE & RISK QUESTIONS

  1. Why is the SIP form so important legally?

Explanation:
It:

  • Reduces the risk of legal disputes after COE
  • Makes clear the responsibilities of the seller during possession
  • Protects the buyer’s rights as the new owner
  • Helps avoid unlawful detainer (eviction) if the seller overstays
  1. What happens if we don’t use an SIP form and seller refuses to leave?

Explanation:
The buyer may need to evict the seller through unlawful detainer court proceedings. Having a signed SIP agreement makes this easier legally. Without it, buyer’s rights are harder to enforce.

  1. Can we collect rent or a security deposit in the SIP?

Explanation:
Yes. The SIP Agreement allows:

  • Optional daily rent
  • Optional security deposit
    Both should be clearly written into the SIP terms.
  1. Is the seller required to carry insurance while in possession?

Explanation:
Yes. The SIP Advisory recommends that the seller maintain liability insurance during their stay, and that the buyer checks their homeowner’s policy with their insurer.

  1. Who is liable for property damage during seller’s possession?

Explanation:
The SIP Agreement typically makes the seller liable for damages occurring during their stay, unless otherwise agreed.

  1. Should the SIP Agreement be referenced in the RPA (Residential Purchase Agreement)?

Explanation:
Yes. You should check the box in paragraph 7D of the RPA (Seller Remaining in Possession After Close of Escrow) and attach the SIP Agreement as an addendum.

  1. Can we change the terms of SIP after escrow is open?

Explanation:
Yes, via an addendum signed by both parties and approved by escrow and lenders (if applicable). But it’s best to finalize SIP terms before escrow to avoid confusion.

đŸ”č MLS & DISCLOSURE CONSIDERATIONS

  1. Do we have to disclose SIP in the MLS remarks?

Explanation:
Yes. It’s best practice to disclose “seller to remain in possession after COE” in agent or public remarks to inform buyer agents and prevent delays.

  1. Should this be included in the initial offer or during counter?

Explanation:
Ideally, it should be included in the initial offer or counter-offer if the seller needs time post-COE to move out.

đŸ”č PRACTICAL BROKER & AGENT QUESTIONS

  1. Can I use SIP for tenant-occupied listings?

Explanation:
No. The SIP is only for sellers staying post-close. Tenant possession should be handled separately with tenant estoppels and proper lease transfer clauses.

  1. How long can a seller stay under an SIP Agreement?

Explanation:
Maximum 29 days. After 30 days, landlord-tenant laws apply and you must use RLAS (Residential Lease After Sale).

  1. Can escrow hold back funds if seller doesn’t vacate as agreed?

Explanation:
Possibly, if all parties agree in writing. However, escrow typically doesn’t hold post-COE funds unless instructed by contract. Brokers should coordinate carefully.

  1. Can the buyer terminate escrow if seller demands post-COE stay last minute?

Explanation:
Possibly, depending on the contingencies remaining and how material the post-COE stay is. It’s always best to discuss this early and include SIP in the offer or counter.

✅ BROKERAGE CHECKLIST: WHEN TO USE SIP FORMS

Scenario Use SIP? Notes
Seller staying 1 day post-COE ✅ Must use SIP Advisory + Agreement
Seller staying 29 days ✅ Must use SIP
Seller staying 30+ days ❌ Use RLAS instead
Tenant remaining after COE ❌ SIP is not for tenants
Seller staying for free ✅ Still use SIP but set rent as $0

Disclaimer:
The questions and answers provided are for general guidance only and may not cover all details or apply to every situation. If anything is unclear or you need further clarification, please visit car.org for official resources and the most up-to-date information from the California Association of REALTORSŸ.

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