When signing an offer to purchase, it is always better to pre-negotiate terms of occupation

28 October 2014

There seems to be an ongoing reluctance for buyers to negotiate an occupational rental, often their reason being that they do not want to take occupation before the transfer date, but, says Lanice Steward, managing director of Knight Frank Residential SA, sometimes there are incidents beyond anyone’s control that will delay the transfer and occupation of the home has to go ahead.

A typical example of unforeseen delays, is the last notice issued by the Deeds Office stating that they were running 10 to 11 days behind due to public holidays and staff training. Something like this is not often factored in and, although they may say ten days, there might be a “knock-on effect” and it causes a massive backlog in transfers taking place, said Steward.

Very often movers, and telephone and internet line transfer dates will have been booked, and the buyer has to vacate his property because someone else is moving in, in addition to the seller having to move into his new premises. If there is a chain of families moving, it is not possible to delay the day and whether the buyer wants to take occupation or not, it simplifies matters just to do so.

In cases such as these, if there is no pre-negotiated occupational rental amount stipulated in the sale agreement, it complicates matters because they then have to decide what is fair for all, which is an unnecessary “backward” step, she said.

Even if the buyer does not want to take occupation before transfer, there should always be a fair, market related rental stipulated in the offer to purchase in case it is needed.