Buyers Should Not Be Confused By The Difference Between Occupation And Possession Of Property

03 March 2005

Many new homebuyers are confused by the difference between occupation and possession of their property - and by the provisions in a sale agreement for the payment of occupational rent.

David Rogers, MD of Homenet, SA's biggest estate agency group, explains that actual possession, or the change of ownership from the seller to the buyer, only takes place on the day that the transfer is registered in the Deeds Office.

However, buyers are often given occupation of their new home before transfer and this can lead to confusion. "Many sale agreements make provision for the buyers to take occupation of the property once their bank has supplied 'guarantees' to the transferring attorney that the purchase price will be paid.

"But this does not mean that they own the property yet, and in most instances, they will be required to pay occupational rent to the sellers for the period between their date of occupation and the actual date of transfer," he says.

On the other hand, Rogers explains, it sometimes happens that home sellers need to stay on in the property even after the date of transfer. "They might be waiting for a new home to be finished, for example, or want to move only after a work contract or school term has ended.

"And that should not be a problem, provided they have arranged it with the buyers beforehand, and agreed, in their turn, to pay occupational rent for the time between the date of transfer and the day they actually move out."

Whatever the arrangement is, though, the actual date on which the buyer will be given occupation (as well as the anticipated transfer date), and the rate of any occupational rental to be paid, should be clearly written into the sale agreement..

"In addition," says Rogers, "the buyer should not be allowed to store anything on the property while the seller is still in occupation, and the seller should not be allowed to leave any belongings on the property after the buyer has taken occupation.

"The potential for disputes over damage - real or imagined - to the other party's goods is just too great, and insurance issues also become very complicated in such circumstances."


Article by : David Rogers- (www.homenet.co.za)