From signing the Offer to Purchase to registration within the Deeds Office, there are a number of dependencies within the transfer process which may cause unforeseen delays. As a result, it is not always possible to accurately predict the date on which a property transfer will be completed, and therefore the date on which the property is officially handed over from the seller to the purchaser.
For most people, planning to move home around an estimated date is not a viable scenario as moving is often logistically challenging and time sensitive.
The solution to this has evolved through the use of an occupation cause within the Offer To Purchase (OTP). The OTP will stipulate the date on which the buyer will take occupation of the property, as agreed upon by both parties. This date may be stipulated as “on registration” should this be suitable to the context of the sale, however, a specific date may also be stipulated regardless of whether this falls before or after the date of registration.
The costs of occupation
Should occupation take place on a date either prior to or after registration, the effect is that an individual who is not the owner of the property will have occupation of that property. As such, the person in occupation should pay the owner for this use.
Should the buyer, therefore, take occupation before registration is complete, he or she will be required to pay the seller what is termed occupational rent. A similar payment will be made by the seller to the buyer should the seller retain occupation for a period after the date of registration.
The value of this occupational rent should be clearly decided upon, and stated in the OTP to ensure no disagreements arise at a later stage.
Changing the date of occupation
While it is possible to amend the date on which the buyer will take occupation, it is important to note this must be done through an addendum to the contract of sale. A unilateral decision and action that impacts this occupation, that is not in accordance with the contract, could be considered a breach of contract and can incur severe consequences.
To avoid this, an addendum must be drawn up, stipulating the changes to the original contract and must be signed by both the buyer and the seller, after which the new terms in the addendum will come into force.
Written by Wessel de Kock