PAULA'S SOUTHAMPTON BLOG: WHO IS THE KEEPER OF THE KEY?...A Deal Closes And No One Has The Key!

WHO IS THE KEEPER OF THE KEY?...A Deal Closes And No One Has The Key!

WHO IS THE KEEPER OF THE KEY?...A Deal Closes And No One Has The Key!

I have a client who is selling his home; he bought the house with a tenant in place and then decided the house was too small for his family--so he wants to sell it.

There are some real issues, one of which is: No one bothered to give him the keys at the closing when he bought the new home!

I have asked myself "what would I do if I bought a house and no one gave me the keys at the closing??"---No one, not the real estate agent, not the original owner and not even the lawyer he hired to handle the deal for him, thought of giving the key to him.

Not only that, how did he close without asking for the key?

It ony came to light when I asked him for the key so I could show the house for sale...sorry, no key!

I am in amazement that something so primary as a key to a new house is not even discussed at the closing--or at any point for that matter......

It now appears that the only person with a key is the tenant. She rented the brand new house as a year round tenant during the original ownership and there was a key pad built right in the door handle.

The tenant was a Nervous Nelly and did not want to have a key pad as a way to enter the house--it did not seem too safe to her. So, she had a locksmith come, disable the keypad and install a new lock! All without the permission of the then homeowner!

Now there is a buyer for the house from the new owner and it will likely close before the tenant's lease is up. I want to make sure there are no complications about the key with this deal---

So, I asked the lawyer of the current owner:

  • What is likely to happen if the tenant does not want to hand over the key to the house to the new buyer before she officially leaves the house at the end of her lease (lease ends in May, 2014)?
  • How does the current owner get the key? Does he have to demand it from the tenant with the threat of eviction if she does not turn it over immediately?
  • Who is the party legally responsible for getting a key for the new owner?..Is it the sellers lawyer, the sellers agent or the seller himself?

I have not heard any answers to my questions yet and I am getting a little nervous myself! I have always taken the responsibility of being the "Keeper of the Key" very seriously---I feel that I am acting on behalf of the seller if it is my listing and I have the responsibility to see to it that I turn the key over to the new buyer's agent at the closing! As the buyers representative, the agent has the responsibility to see to it that the key is available to be handed over to his/her client!

WHAT SAY YOU??? As an agent for the seller, is it your responsibility to hand over the key to the buyers agent? Please make your comments below:

 

 

 

 

 

 

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Paula I. Hathaway, Senior Broker Associate, Douglas Elliman Real Estate

Southamtpon Village Real Estate Specialist since 1995;  Also Specializes in North Sea, Noyac, Water Mill and Bridgehampton, New York

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Comment balloon 14 commentsPaula Hathaway, REALTOR, LBA • January 04 2014 06:34PM

Comments

That is most embarrassing for sure. My guess would be the seller is responsible to provide a key, and if there is one, then the seller would likely have to absorb the cost for a locksmith to re-key the house before the sale.

Posted by Ed Silva, Central CT Real Estate Broker Serving all equally (RE/MAX Professionals, CT 203-206-0754 ) over 4 years ago

Wow! 

     At our (typical) Closings, the "Keys" are laid on the closing table in front of the Title Attorney or Closing Agent when the Closing begins.  When the last paper is signed (usually the Deed), the Keys are passed to the Buyer, the Seller Proceeds check is handed to the Seller, and the Realtors (if present) are handed their checks.

    I cannot imagine a Closing without the Keys!

Posted by Fred Griffin, Licensed Florida Real Estate Broker (Fred Griffin Real Estate) over 4 years ago

Ed: The seller is willing to do that but he is left with the idea that he had an agent and a lawyer to whom he paid a lot of money to do a job for him and they failed him!!He is not a happy camper right now....

Fred: Neither can I..I asked him (the seller and now owner) how it could be that he bought something and never asked "where is the key?" He told me he was not at the closing and was relying on his representatives to handle things like that..I told him I agree that they should have done that and then told him that I had never had something like that happen---I feel it is my responsibility to, at the very least, see to it that the keys are available, and I always hand them to the new buyers agent myself!

Posted by Paula Hathaway, REALTOR, LBA, ...The Most Informed Agent In The Hamptons! (Douglas Elliman Real Estate) over 4 years ago

I am asking for a key before closing.  Most agents will say you can't have them until closing is done and then at least I know they have them.

The other thing is how did you get into the property if there was no keys

Posted by William Feela, Realtor, Whispering Pines Realty 651-674-5999 No. (WHISPERING PINES REALTY) over 4 years ago

William: I have never gotten a key and I have to rely on the tenant to be there to get in---she holds all the cards in this game! She also "needs" to be there whenever anyone goes to the house to show it.

Posted by Paula Hathaway, REALTOR, LBA, ...The Most Informed Agent In The Hamptons! (Douglas Elliman Real Estate) over 4 years ago

A very strange situation. We don't use attorneys in our closings. When I represent a buyer, I always get the house keys from the listing agent as soon as (if not before) we get word that the purchase is on record

Posted by Lottie Kendall, Serving San Francisco and the Silicon Valley (Pacific Union International) over 4 years ago

Lottie: That's a good idea--especailly when there is no attendance at the closing--in the case here, the buyer was not at the closing and everyone else lost track of the "key" part of a closing!!

Posted by Paula Hathaway, REALTOR, LBA, ...The Most Informed Agent In The Hamptons! (Douglas Elliman Real Estate) over 4 years ago

In this area the seller's agent usually hands over the keys at closing after all the papers are signed while the checks are given to the seller and the REALTORS®. The exception to this (for me) was when the Buyers agent announced that he already had the keys...they had scheduled the final walk through for immediately before closing (no idea why) and after the walk through he pulled the keys from the lock box and gave them to the buyer!

 

Posted by Diana Zaccaro, Your Brevard County, Florida coastal connection! (Tropical Realty Beachside power by eXp) over 4 years ago

Paula,

Very interesting dilemma.  I think you are wise to ask an attorney.  We have always had the keys to commercial space that we were either leasing or selling.  In larger office towers, the building office kept the keys, and we borrowed them for the showing.  But, then each state has different laws... all teh best, A

Posted by Ron and Alexandra Seigel, Luxury Real Estate Branding, Marketing & Strategy (Napa Consultants) over 4 years ago

Diana: That sounds like putting the cart before the horse to me---traditionally here the key is not handed over until the the closing is over and the deed is in the new buyers name. I have never seen anything different than that until this situation.

Hi Alexandra: To my knowledge there is no real law, just customary practices. If the new buyer is not at the closing I would make sure their lawyer would have the key to then send on to his/her client. Of course if it is my buyer, I would make sure the key is overnighted to him/her after the closing. In this case the tenant represented a problem that no one felt responsible for clearing up before closing.

Posted by Paula Hathaway, REALTOR, LBA, ...The Most Informed Agent In The Hamptons! (Douglas Elliman Real Estate) over 4 years ago

Paula, Exactly. You could have heard a pin drop when the buyer's agent made that statement...everyone at the table stared in disbelief and sat there speechless. Since it was a condo, there were still other keys to be handed over (mailbox, pool, etc) but pulling the keys from the lockbox should never be done.

 

Posted by Diana Zaccaro, Your Brevard County, Florida coastal connection! (Tropical Realty Beachside power by eXp) over 4 years ago

Diana: I think the lack of real clarity between the agents about the protocol gets in the way of things being done correctly...the selling agent should be very careful to NOT turn over the keys too soon and the buyers representation should never assume it is ok to give them out before the deal is closed. The bigger problem, as is shown here is the complete and careless disregard for getting the key in hand in the first place to turn over to the new buyer. In this case I blame the selling agent who did not insist on getting the key from the original owner. That was the builder of the house and there was no listing agent. In any case it was a complete disaster that there was never a key turned over to the buyer. 

Posted by Paula Hathaway, REALTOR, LBA, ...The Most Informed Agent In The Hamptons! (Douglas Elliman Real Estate) over 4 years ago

Paula, we don't use attorneys for closings in FL, title companies handle them, keys are turned over to the title company by the listing agent on the day of closing. In your case, I would certainly hope seller's attorney who was paid a good amount of money should be responsible enough to obtain the keys prior to closing.
I've couple of short sale homes that were tenant occupied and they had no motivation to leave the house, made as difficult as they possibly can. The only thing that worked for them is to have couple of months of free rent as an incentive to move out.

Posted by Beth Atalay, Cam Realty of Clermont FL (Cam Realty and Property Management) over 4 years ago

Beth: In this case the lawyer was out to lunch and the agent was too--they both let the buyer down and now she has to deal with it!

Posted by Paula Hathaway, REALTOR, LBA, ...The Most Informed Agent In The Hamptons! (Douglas Elliman Real Estate) over 4 years ago

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