Avoid the pitfalls that can put you out on the street
Picture the scene.
The 1 st of the month dawns – the day the Smith family is to move out of its rented garden flat and take occupancy of the first home it has ever owned.
The movers arrive on schedule at eight o’ clock, and the final chapter begins. Finally at about eleven-thirty it’s all done. In a state of high excitement and eager anticipation, the Smiths lead the way in the family car, and they pull up in front of their new home a little before noon, as arranged.
Then disaster strikes. The seller is not standing in front of an empty house dangling a set of keys. He – and all his furniture and belongings – are still in the house, and he claims he’s only due to be moving out in two weeks’ time.
The Smiths – and their furniture and belongings – have nowhere to go. New tenants are already moving into the apartment they have just vacated, the movers want to know what they must do with the furniture, and the seller says he’s going nowhere for another fortnight.
This is the sort of dilemma that all of us would wish to avoid at all costs.
How did it happen? And how can you – as a new home-owner – avoid the problem and cost of such a predicament?
Obviously from the above example, date of occupancy is a key factor in the purchase of a house, and needs to be spelled out very specifically. This, plus a number of other issues directly related to your date of occupancy, will be discussed in this article.
The date of occupancy itself
It goes without saying that you need to ensure that you are dealing with a reputable and properly licensed estate agent. The agent – together with you as the prospective buyer – will draw up a “Sales Agreement” or “Offer to Purchase”.
It is this document which must specify the date of occupation. Be sure to avoid vague statements such as “to be arranged”. The most popular condition for occupation is “on transfer” or “on transfer, or sooner by agreement”.
In the event of any subsequent negotiation regarding a change in the date of occupancy, preferably have your agent involved in these discussions. Either way, if you and the seller decide to change the occupancy stipulated in the “Offer to Purchase”, ensure that it is documented properly.
Any good agent will control this process and see that an addendum, signed by the buyer and the seller, is lodged with the transferring attorney. The secret is to have no homemade arrangements – that is a recipe for disaster!
Occupational rental
The issue of occupational rental is linked directly to your date of occupation. Obviously, if you take occupation before date of transfer, you will have an agreement in place to pay occupational rental for the period from occupation to transfer. The exact details must be clearly stipulated in the “Offer to Purchase”, and any subsequent changes in dates or amounts must be properly documented in an addendum signed by both parties.
Both parties also need to ensure that a specific arrangement is made regarding payment of occupational rental, that the estate agent concerned is part of these discussions, and that buyer, seller and agent fully understand the details regarding how much will be paid, to whom, where, when and how.
Another important aspect is to stipulate a clear understanding as to whether the seller is purchasing the property voetstoots or not. Very often a buyer moves into the house he has bought and discovers some problem, such as a broken swimming pool pump or undisclosed damp. He then immediately threatens to withhold occupational rental until the problem has been solved by the seller.
The point is this. Negotiated occupational rental and emerging problems with the property are separate issues, both of which should be clearly laid out in the “Offer to Purchase”. If not, however, they must be dealt with separately.
In terms of the law you are liable for the occupational rental, so pay it and take up the problem with the seller separately. Depending on the circumstances you may need to involve attorneys at some stage, but hopefully agreement will be reached before that stage.
Another more informal matter which nevertheless does require an arrangement between the two parties is that of the buyer being allowed reasonable access to the house for the purpose of taking measurements for curtaining. Even an issue as menial as this can cause problems if not arranged properly.
Once again, we must emphasise that your dealings on all of the above matters relating to occupation should involve your estate agent. At all costsnavoid separate arrangements between yourself and the seller. Let your agentnhandle them all and ensure that they are properly documented.
Bear in mind that there is more to occupancy than simply moving your furniture and yourselves in on a given date. Several other matters have to be attended to as well:
Electricity and water:
The seller will be organising to have these services terminated on the agreed date of occupancy. You, as the buyer, must report to the relevant council offices in good time with your signed “Offer to Purchase” and a copy of your identity book, to arrange for a transfer to your name and a reconnection on the same date.
Telephone:
If the seller is moving within the same area, he will be applying to have his telephone service transferred to his new address in the neighbourhood from your date of occupancy. In this case you will have to apply to Telkom for a new telephone service, unless you are also moving within the same area and can apply for a transfer of your existing service.
If the seller is moving to another area he will have to apply for a new service and terminate his existing service. And if you are moving in from another area and also require a new service, you can obtain an application form from
Telkom to transfer the seller’s existing service at the address in question from the seller to yourself.
Keys:
This a niggling yet vital aspect of your occupancy. Be sure to have made a definite arrangement for the handover of the house keys from the seller to yourself – preferably on the day before you will actually take occupancy.
The exact details must be negotiated, but again it is advisable that the estate agent concerned is part of these discussions.
Tenants and domestic workers:
There have been cases where the seller has been co-operative, but the tenant renting the property, or the domestic worker living on the property, refuses to vacate on the stipulated date. You – as the buyer with an agreed date of occupancy – are strongly advised to insist on a special clause in the “Offer to Purchase”, whereby the seller undertakes to ensure that any tenant or domestic worker vacates the property by the due date.
A final tip:
So much for the business side – now one final tip.
Investigate the possibility of having your date of occupation in the middle of the month. This is not always possible, but if it is, it will save you a great deal of money in actual removal costs, as well as problems with the actual availability of removal companies at the traditionally chaotic month’s end.
Disclaimer: This article is for information purpose only and does not constitute legal advice. Call on our attorneys for legal advice, rather than relying on the information herein to make any decisions. The information is relevant to the date of publishing.