Grocott's Mail
  • NEWS
    • Courts & Crime
    • Features
    • Politics
    • People
    • Health & Well-being
  • SPORT
    • News
    • Results
    • Sports Diary
    • Club Contacts
    • Columns
    • Sport Galleries
    • Sport Videos
  • OPINION
    • Election Connection
    • Makana Voices
    • Deur ‘n Gekleurde Bril
    • Newtown… Old Eyes
    • Incisive View
    • Your Say
  • ARTSLIFE
    • Cue
    • Makana Sharp!
    • Visual Art
    • Literature
    • Food & Fun
    • Festivals
    • Community Arts
    • Going Places
  • OUR TOWN
    • What’s on
    • Spiritual
    • Emergency & Well-being
    • Safety
    • Civic
    • Municipality
    • Weather
    • Properties
      • Grahamstown Properties
    • Your Town, Our Town
  • OUTSIDE
    • Enviro News
    • Gardening
    • Farming
    • Science
    • Conservation
    • Motoring
    • Pets/Animals
  • ECONOMIX
    • Business News
    • Entrepreneurship
    • Personal Finance
  • EDUCATION
    • Education NEWS
    • Education OUR TOWN
    • Education INFO
  • Covid-19
  • EDITORIAL
Facebook Twitter Instagram
Trending
  • In the words of Nelson Mandela, “To deny people their human rights is to challenge their very humanity”
  • Flooding at the James Kleynhans Water Treatment Works
  • Avbob 2023 Poetry Competition Second Place: Jeannie Wallace McKeown
  • Avbob 2023 Poetry Competition Winner: Sithembele Isaac Xhegwana
  • Residents of Extensions Nine, 10, Transit Camp, Phumlani and Enkanini voice discontent!
  • Makhanda Creatives Speak Out
  • Running towards a drug and alcohol-free Makhanda
  • What’s On 23 – 30 March
Facebook Twitter Instagram
Grocott's Mail
  • NEWS
    • Courts & Crime
    • Features
    • Politics
    • People
    • Health & Well-being
  • SPORT
    • News
    • Results
    • Sports Diary
    • Club Contacts
    • Columns
    • Sport Galleries
    • Sport Videos
  • OPINION
    • Election Connection
    • Makana Voices
    • Deur ‘n Gekleurde Bril
    • Newtown… Old Eyes
    • Incisive View
    • Your Say
  • ARTSLIFE
    • Cue
    • Makana Sharp!
    • Visual Art
    • Literature
    • Food & Fun
    • Festivals
    • Community Arts
    • Going Places
  • OUR TOWN
    • What’s on
    • Spiritual
    • Emergency & Well-being
    • Safety
    • Civic
    • Municipality
    • Weather
    • Properties
      • Grahamstown Properties
    • Your Town, Our Town
  • OUTSIDE
    • Enviro News
    • Gardening
    • Farming
    • Science
    • Conservation
    • Motoring
    • Pets/Animals
  • ECONOMIX
    • Business News
    • Entrepreneurship
    • Personal Finance
  • EDUCATION
    • Education NEWS
    • Education OUR TOWN
    • Education INFO
  • Covid-19
  • EDITORIAL
Grocott's Mail
You are at:Home»Uncategorized»The truth about occupational rent
Uncategorized

The truth about occupational rent

Grocott's MailBy Grocott's MailMarch 8, 2016No Comments3 Mins Read
Facebook Twitter Pinterest LinkedIn Tumblr Email

Many first-time buyers don’t understand the difference between taking possession of their new property and taking occupation – or the provisions in a sale agreement for the payment of occupational rent.

Many first-time buyers don’t understand the difference between taking possession of their new property and taking occupation – or the provisions in a sale agreement for the payment of occupational rent.

“Actual possession only happens when the transfer of ownership from seller to buyer is officially registered in the Deeds Office,” says Shaun Rademeyer, CEO of BetterLife Home Loans. “However, buyers are sometimes allowed to occupy their new home before the transfer process has been completed, and this can lead to confusion.”

He explains that many sale agreements provide for the buyers to be able to move into the property by agreement with the seller as soon as their bank provides “guarantees” to the transferring attorney that the purchase price will be paid.

“But this does not mean that they actually own the property yet, and in most instances, they will be required to pay occupational rent to the sellers for the period between the day they move in and the actual date on which formal transfer takes place.

“And the calculation of this “rental” has nothing to do with the buyers’ projected monthly bond repayment, or the seller’s current monthly instalment. It is usually set quite a lot higher, at around 1% of the purchase price per month, so buyers will need to budget for this – or consider whether it is really cost effective for them to take occupation before transfer.”

 On the other hand, Rademeyer says, sellers sometimes have a reason that they need to remain in the home even after the date of transfer. “They could be waiting for their own new home to be renovated, for example, or finishing a school term or a work contract.

“In such cases, if the buyers are amenable to them staying on, they would be the ones having to pay occupational rent, for the time between the date of transfer and the day they actually move out. And once again, they will most likely be paying more than the monthly bond repayment they have been used to, and will need to budget for the extra cost.”

He says that when such arrangements are being made, it is most important that the actual date on which the buyer will be given occupation, the actual date on which transfer is anticipated and the actual amount of occupational rent to be paid are all clearly written into the sale agreement and signed by both parties to avoid the possibility of misunderstandings and possible disputes.

“Also, the agreement should specifically provide for the seller to keep up the homeowner’s insurance (HOC) until the date of transfer – even if the buyer is already living on the property – to make quite sure the home is covered in case of fire, flood, wind or other disastrous damage that might occur.

“And finally, the buyer should not be allowed to store anything on the property while the seller is still living there, and the seller should not be allowed to leave any belongings on the property after the buyer has taken occupation.

The risk of a dispute over damage – real or imagined – to one another’s goods is very high, and insurance issues could then also become very complicated.”

Previous ArticleElections 2016 – Is your councillor up to it?
Next Article What’s your emergency plan?
Grocott's Mail

Comments are closed.

Tweets by Grocotts
Newsletter



Listen

The Rhodes University Community Engagement Division has launched Engagement in Action, a new podcast which aims to bring to life some of the many ways in which the University interacts with communities around it. Check it out below.

Humans of Makhanda

Humans of Makhanda

Weather    |     About     |     Advertise     |     Subscribe     |     Contact     |     Support Grocott’s Mail

© 2023 Maintained by School of Journalism & Media Studies.

Type above and press Enter to search. Press Esc to cancel.