Posted by: Riaz Ebrahim | 2014/10/04 09:33
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
Posted by: Liora Bamberger | 2014/10/08 16:43
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
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