What you need to know about occupational rent!

You have recently purchased a property and the transfer process is ongoing and you’ve already put in notice for your lease and you have been notified that your property registration won’t be effected by then? Or you’re selling your home and the registration is looming closer than anticipated and you’re not ready to move? So, what options are available to you in these two instances?

As the current purchaser of a property you can negotiate with the seller to move in before date of registration. If you are the current seller of the property you may negotiate with the purchaser to stay on longer than anticipated after registration of the property

In any of the two circumstances, you will be required to pay occupational rent to the owner of the property at the time either as the seller or the purchaser.

Occupational rent is usually charged at 1% of the purchase price of the property but can be negotiated between parties.

You will be required to pay the full rental amount upfront wherein you will be charged per day of your stay in other words occupational rent is charged on a pro rata basis until the date of registration.

Most Offer To Purchases make provision for early occupation and occupational rent. However in most cases the parties will sign an addendum stipulating the conditions of the early occupation. The addendum is then an extension of the Offer to Purchase signed initially.

There are always options available to a distressed purchaser or a seller, talk to your agent or conveyancing attorney to assist in the process.

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