Residential property transfers: get the occupational dates and occupational rentals right.
Residential property transfers: get the occupational dates and occupational rentals right at the outset, says Alexander Swart director.
In the South African residential property market, when a home is sold, conflict and acrimony can result from a lack of clarity about the occupation date and the interest chargeable for occupation when the occupant is no longer or not yet the registered owner, says Rowan Alexander, Director of Alexander Swart Property.
One of the main lessons we teach our agents at Alexander Swart Property is that they must pay careful attention to the clauses in the Deed of Sale relating to this matter. It is essential to avoid confusion regarding the occupation date. Quite often this date has to differ from the transfer date, i.e. the date on which the property is registered at the Deeds Office in the name of the purchaser and provision must be made for these cases.
In most cases, says Alexander, the purchaser does move into the home on the transfer date and this is always preferable. However circumstances may make it necessary for the home seller to stay on in the house for a few extra days or weeks or for the buyer to move in before or after the transfer date.
Quite often the buyer may have to vacate his current home or rented property before the transfer of his new home actually takes place. Alternatively, he may be unable to move until after transfer because, for example, he has to fulfil work obligations elsewhere.
In these cases it is essential to make provision for the changed situation, especially as the seller and the buyer at the time of concluding the deal may not be aware of the problems regarding occupation which they will later encounter.
Where the occupation date is different from the transfer date, says Alexander, it is also important that the occupational rent should have been fixed at the outset, i.e. at the time of the signing of the Deed of Sale. There have been cases where buyers have moved in early, only to find themselves confronted with a massive occupational rental out of all proportion to the value of the home. In other incidents the sellers have stayed on for a lengthy period of time for a ridiculously low rental because, again, the occupational rent was not stipulated clearly in the Deed of Sale.
Another important point to note, says Alexander, is that if a buyer moves in before the transfer date, it has to be made clear to all parties that the ‘risks and benefits’ pertaining to the property remain the responsibility of the seller until transfer takes place. This is especially important on insurance issues: even though the seller is not living in the home, any damage (e.g. a fire) must be covered by his insurance policy until transfer is effected.
Certain sales documents, says Alexander, make only casual mention of occupational dates and these are sometimes simply assumed to be the same as the transfer date. Such documents, he says, are unprofessional and a disgrace to the estate agency profession.
In all property deals the agent must see to it that all along the line there is complete clarity and acceptance of occupational dates and rentals as to avoid misunderstandings.
For further information please contact Rowan Alexander on cell phone number 082 581 3116 or by email rowan@asproperty.co.za.
13 Oct 2017
Author Independent author