Short sale should have been initiated by a seller after they reviewed all their options. Furthermore, if the seller then went through the short sale process and agrees to the approved short sale terms from the lenders and the buyer and seller get into escrow; I would think the seller actually does want to sell and agree to move out.
All my short sale sellers are very grateful that they are finally done with the short sale and they can put this to the past and start the recovery and rebuild process. I have never had that kind of problems where the short sale seller decided at the last minute they don't want to go through with it.
However, your question is WHAT IF? Then yes, stipulate that the seller has to move out a couple days before closing, before the loan is funded and close escrow.
One other thing: make sure to make a detailed video of the property during the final walk-through to make sure the sellers don't take items that are supposed to convey. Short sellers are famous for this.
Para 5 of the CAR RPA covers "Closing and Possession", and defaults to 5PM on the day of Close of Escrow. Para 16 of the RPA covers "Final Verification of Condition", which allows you to perform a final inspection of the property.
The following is not legal advice, just opinion:
I would speak with the Listing Agent and ask them to reiterate what Para 5 states and get confirmation this has been done. You might also make the LA aware that you intend to perform the final Para 16 walk-thru 2 days before the scheduled COE and let them know if it looks like the Sellers will not make the COE date for moving out COE will have to be extended until they have substantially vacated. This can be a tricky situation due to rate locks.
I would suggest you call the CAR legal hotline to get some legal tips as well!
If their choise is to remain in the home....and make things complicated....their choice is to be foreclosed on and evicted bu the bank!
The best advice that you could give your buyers is to speak with a real estate attorney. Each state has different laws. It is best that your clients get prepared for whatever happens after the close of escrow. Any advice you get here, unless it is from an attorney in the state of California, I would be very cautious in passing on.