Occupational rent: a concept that most buyers and sellers have some idea about – but they are not always certain of the nitty gritty.These questions can be answered by the sales agreement between the buyer and seller – but the details are often overlooked in the excitement of finalising the transaction. This can lead to friction down the line.
“The logic behind this arrangement is that irrespective of an impending change of ownership, the current owner is still required to service their bond repayment, and manage costs associated with the upkeep of the property until ownership is transferred.” “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.”
“It can be that a seller might need to retain occupation after registration, or the purchaser may need to move in prior to taking ownership of the property.” While agents and conveyancing attorneys can do their utmost to register a transfer on the date agreed to in the contract, she says the Deeds Office turnaround time does fluctuate and so there may be situations where a buyer or seller intended to only move on the selected transfer date but now needs to move sooner or later.
Connellan adds: “Be fair and reasonable when negotiating and be sure to include this clause in your contracts upfront even if occupation is only on date of transfer. This is for the benefit of both parties and may never come into effect, but is always best negotiated upfront.
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