How long must I pay occupational rent? - Guest Experts, Advice
Please note that you are using an outdated version of Internet Explorer which is not compatible with some elements of the site. We strongly urge you to update to a newer version for optimal browsing experience.
04 Feb 2013

How Long Must I Pay Occupational Rent?

A Property24 reader asks:

A reader asks how long a buyer is expected to pay occupational rent, supposing the transfer could take months to go through.

Is there a set period for how long an occupational rent agreement should be honoured after signing the sales agreement? For example 1, 2, 3 months or must a buyer keep on paying occupational rent until the transfer of the property takes place? 

Arnold Maritz, co-owner of the Lew Geffen Sotheby’s International Realty franchises in the Southern Suburbs and False Bay, Cape Town, advises:

No, there is no statutory limit for the period for which occupational interest may be paid. It is generally a term of a deed of sale that occupation will take place on a particular date and if the transfer takes place after the date of occupation, occupational interest is paid at an agreed amount for the period from occupation until transfer. It is important to have a market related occupational interest, or otherwise the purchaser might be tempted to delay the transfer. 

Typically, the deed of sale will provide that the transfer must take place on a particular day or as soon as possible thereafter. There is no limit to how far in the future that day may be. Alternatively, the deed of sale may merely provide that the transfer must take place on or as soon as possible after occupation. 

The point the question is really getting at is, what happens when the transfer is delayed long beyond the date of occupation and stipulated date for transfer? Is there a cut-off point after which occupational interest is no longer payable, assuming that the seller is causing the delay? 

Again the answer is no. One has to look at the circumstances. If the transfer has been delayed for an unreasonable length of time under the circumstances the seller may be in breach of the agreement. The purchaser would not be entitled to stop paying the occupational interest. He would have to "put the seller to terms" by, in writing, pointing out to the seller that by not having passed transfer within a reasonable time, he is in breach of the agreement, which would require the seller to rectify the breach by a particular date. Should the seller fail to rectify the breach, the purchaser would be entitled either to cancel the transaction and claim any damages which he may have suffered, or approach the courts for an order of "Specific Performance" where the court orders the seller to pass transfer.  

Readers may submit questions to Property24’s Guest Expert panel and/or comment below. We may not be able to answer all questions received, but all will be considered. 

About the Author
Arnold Maritz

Arnold Maritz

Arnold Maritz is the co-owner of the Lew Geffen Sotheby’s International Realty franchises in the Southern Suburbs and False Bay, Cape Town. www.sothebysrealty.co.za


Next article

I sold my home but buyer is in breach

A reader says she signed an addendum that the buyer would pay occupational rent, which wasn't forthcoming. Must she move out or wait for transfer?

Read more
I sold my home but buyer is in breach
Newsletter
Get the latest property news.
Select your options:
Get the latest news
Share
Google Plus
EmailEmail Print Print
Top Articles
Situated 5km from scenic Somerset West, Acorn Creek offers 3 bedroom hom...

Britain shocked the world by voting to leave the European Union, and man...

Situated in Essenwood in Durban, this elegant architecturally-designed h...

Whether you’re a bundu basher or not, these bushveld beauties will take ...

The centre, due to open in December, will provide convenient shopping to...

Loading

Your browser is out of date!

It looks like you are using an outdated version of Internet Explorer.

If you are using Internet Explorer 8 or higher, please verify that your Internet Explorer compatibility view settings are not enabled.

For the best browsing experience, update to the latest Version of Internet Explorer or try out Google Chrome or Mozilla Firefox.


Please contact our Property24 Support Team for further assistance. Tel. +27 (0)861 111 724