Occupational Rent Explained.
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Occupational rent is a concept that most buyers and sellers have some idea about - but they are not always certain of the finer details.
Who pays the rent to whom? How is this rent calculated? And when does it become payable?
The amount is agreed upon in the agreement of sale, and is usually equal to the amount the property can be let for.
The occupational rent clause in an agreement of sale is to make sure that the seller is financially compensated if the buyer moves into a property before registration and transfer occurs. It can also protect the buyer if the seller stays on in the property after transfer.
"Where the occupation date is stipulated then occupational rental is a must. This is to ensure that the party enjoying occupation of the property, while not being the registered owner, pays an appropriate amount to the registered owner.
If the seller is unable to move out by that date he or she is liable to pay occupational rent from the day after transfer.
Occupational rent is pro-rata based on the number of days in occupation.
The conveyancing attorneys may assist again by deducting the pro-rata occupational rent from proceeds of sale.
Author: Campbell Property Group
