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What you need to know about occupational rent

What you need to know about occupational rent

Author: Pranil Maharaj
Date: 2017-09-22

Whether you are a buyer or a seller, it is vital that you are familiar with the terms and conditions stipulated in the property sales agreement.

South African law states that those who would like to either sell or buy a property are required to reduce all contractual agreements to writing.

The reason for this is to reduce the risk of ambiguity during the property transaction, so that each party has a clear understanding of what is required of them.

The clause pertaining to occupational rent is crucial because it shields both the buyer and seller. It ensures that the seller is financially compensated if the buyer moves into the home before transfer.

Conversely, it provides the buyer with financial compensation if the seller is still living in the property after the transfer has occurred.

The occupational rent provision is often glanced over because most buyers only intend to move into the property once it has been registered in their name.

It is essential that the occupational clause stipulates the amount of occupational rent to be paid. Even if the date of occupation is listed as the date of transfer, the rental amount still needs to appear in the agreement in writing to avoid conflict or any misunderstandings.

The seller will ultimately decide what amount the occupational rent will be, however, both parties must be in agreement before signing the document.

Having an understanding of the sales agreement and its conditions will help sellers and buyers to avoid any unnecessary conflict, and will make the entire process of buying or selling a home far less daunting.