Property law

question

Posted by: Riaz Ebrahim | 2014/10/04 09:33

OCCUPATIONAL RENT

Hi, I have purchased a new townhouse off plan in April 2013. I paid a deposit of R15 000 and I also paid for the property in cash. I was promised that the property will be ready in September 2013 but the property was only ready in May 2014.

I recently received an invoice stating that I owe occupational rent for 5 months. According to the property agents they are waiting for the transfer to be done by Johannesburg Council and I will still be liable to pay occupational rent until the transfer is done.

Am I responsible for this payment although I paid cash for the property? Can it be a problem on the developers' side that's why the council haven't done transfer as yet? Does the council normally take so long to do a transfer? Your response will be greatly appreciated.

Kind Regards Riaz

expert answer

Posted by: Liora Bamberger | 2014/10/08 16:43
Dear Riaz,
Your question is made up a a few components, so I will answer them one at a time. 
1. OCCUPATION AND OCCUPATIONAL RENT - Please consult your Sale Agreement. In some agreements, there is a clause which states that as soon as the unit is ready, you become liable for payment of occupational rent. Occupation is when the keys are given to you, so if this happened in May 2014, you are liable for payment of occupational rent from that date to date of registration of transfer. 
2. ARE YOU LIABLE FOR RENT EVEN THOUGH YOU PAID CASH FOR THE PROPERTY - yes, because all the money you have paid is held in a Trust Account by the transferring attorneys. You are entitled to all the interest earned on that money and you should ask the transferring attorneys to send you copies of all the statements in respect of the Section 78(2A) account in which your funds are held. 
3. THE COUNCIL HASN'T DONE THE TRANSFER - The Council does not do the transfer. The Council needs to issue clearance figures to the developer in respect of the whole property on which the development has been built, and after the developer has paid, the Council will issue a Clearance Certificate. Once the transferring attorneys have received the Clearance Certificate, and if all the other aspects of the transfer are in order, they will be able to lodge the transfer documents in the deeds office for registration, which normally takes 10 working days from date of lodgement. There are problems at the City of Johannesburg (not sure where your property is situated) for some time now, although in some instances the clearance figures are issued very quickly. The developer may have outstanding issues at the Council which need to be resolved before the clearance figures are issued. The transferring attorneys will now what those issues are. 
Good luck with your acquisition, Riaz

Fin24 cannot be held liable for any decisions made based on the advice given by independent experts, and disclaims all responsibility or liability for any damages whatsoever resulting from the use of the site

user comments

Posted by: Joe Ngumede | 2019/02/19 09:39
Good day Thank you for your advises, you have given to other people. they are helpful. Kindly advise i bought a new house from Calgro in 2016 took occupation, however now the house is amazingly having cracks on the walls, roof tiles are loose and some are falling when there is strong winds and also when there is rain the water come in through the ceiling. Kindly advice
Reply to Joe Ngumede
Posted by: Anonymous | 2017/07/05 11:18
hey i purchased a house and had financial problems paying occupational rent i went to explain my situation to the sales agent and he told me not to worry i won't be ask to vacate the property the day before the property was registered onto my name i was to i must first pay the occupational rent or the transfer won't go though the next day i got a email to confirm the property was successfully registered on my name,3 month after occupation complained about snags and completed the snag list emailed it to them a few times nothing has been fixed i went to their office on a few times i was told it will be fixed i must give them time and the last time i complained i was told they can fix it because its more than a year have past i took it the house is on my name and i have not paid them the occupational rent and there was no request from them for more than 1 year and seven month i had to fix it until yesterday i received a letter of demand court summon what do i do
Reply to Anonymous
Posted by: MIK | 2018/06/12 12:10
HI THERE CAN YOU PLEASE TELL ME IF YOU RECIEVED ANY FEEBDACK ABOUT YOUR Q ? I AM SITTING WITH THE VERY SAME PROBLEM
Posted by: PM | 2017/05/12 17:00
Good day, Please can you advise what rights does the Seller have in terms of a buyer who has an outstanding payment on occupational rent. Is there interest charged in terms of missed payment. Can the transfer be withheld if the buyer rental is not settled.
Reply to PM
Posted by: Anonymous | 2014/10/09 16:39
hey Hope you well! I currently purchased a property which will be completed in August 2015 but in the agreement it states I will need to be occupational rental until the property is transferred in my name. Why do developers do this? surely like I'm paying rental to stay in a house I have purchased and further the whole process is dependent on developer to get all the requirements in place to make the transfer happen.
Reply to Anonymous

comment on this story

5 comments
Read the comments policy
Your comment has been posted and will appear shortly.
Please fill in the required fields.