A reader who sold a fixed property wants to know if occupational rent is payable until the date of cancellation of the bond or until the date of registration of transfer.
She adds that the conveyancer who handled the transaction only calculated and levied occupational rental on the fixed property until the date of cancellation of the bond. She questions whether this is correct.
The reader says it was a private transaction, with no estate agent involved and the purchase price was paid in cash.
The purchaser took occupation of the property prior to registration of transfer and before the cancellation of the existing bond.
See the reader’s question here.
In brief, occupational rent is a form of compensation paid by the purchaser of the property to the seller.
This occurs in circumstances where occupation is granted prior to ownership of the property formally changing hands.
The purchaser then has the use of the property, pending transfer, and the rental compensates the seller for the loss of that use.
The seller may also be obliged, as is applicable in this instance, to service a bond pending its cancellation.
The agreement of sale document in this case contains a clause specifically dealing with occupational rental.
It says that if the occupation date does not coincide with the date of registration of transfer, the party occupying the property while it is registered in the name of the seller shall pay occupational rent of a certain amount per month.
This makes it clear that if the date of occupation and date of registration of transfer are not the same, with occupation preceding transfer, the purchaser should pay occupational rent on a monthly basis, or pro rata.
This should be calculated from the date of occupation until the date of registration of transfer.
In this matter it should also be noted that the purchaser was entitled to take occupation from a date specified in the agreement.
Logically, only the transfer of ownership would trigger the conclusion of the purchaser’s obligation to pay occupational rental.
The cancellation of the bond merely results in the cessation of the seller’s obligation to pay the banking institution.
There is no indication as to the time period that had lapsed from date of cancellation of the bond on the fixed property until the date of registration of transfer.
Usually these two events take place close together.
But, in this instance, it would appear that the conveyancer elected to see to the cancellation of the bond in advance of effecting the transfer of ownership of the fixed property.
Whatever the reason for this may be, the agreement is quite clear as to the manner in which occupational rental is calculated and payable.
If the time period between the two dates is considerable, the reader could merely put it to the conveyancer that the occupational rental was incorrectly calculated, including a copy of the relevant clause for the conveyancer’s ease of reference in identifying the error.
At this point, however, the greatest difficulty may be for the reader to recover the difference in occupational rental.
The purchaser may well take the stance that the error lies with the conveyancer and not with him, regardless of the fact that it is he, as the purchaser with early occupation, who has benefited.
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