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How to buy a home – What is occupational rent?

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How much do you really know about the home buying process? Sure, house hunting is fun and playing with online calculators does give you an idea of how much house you can afford. But what should you know before you even sign an offer to purchase?

Our friends at MC van der Berg Attorneys have kindly allowed us to republish their MC Purchasers Guide to help educate new and seasoned buyers on the legal ins and outs of home buying.

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7 Tax, bugs and occupational renttermites bugs


A property transaction cannot be processed unless both parties have income tax numbers. If you do not have one you must take immediate steps to obtain one.

SARS carries out a risk analysis on both the purchaser and the seller before issuing the transfer duty receipt. All tax-related matters (whether private or otherwise), including but not limited to tax returns and payments, should therefore have been handed in and paid in full. If this is not the case you should do so immediately. Failure to do so will delay or even terminate the transaction.

Getting compliant

Landlords cannot simply disconnect a tenant's electricity.

The Occupational Health and Safety Act requires the seller to provide the purchaser (or the transferring attorney) with certain compliance certificates before occupation or registration takes place, whichever is the earliest.

The cost of these certificates together with any repair work is for the seller’s account. The scope of these certificates is limited as it simply certifies that the installation involved is safe. It does not certify that all electrical, gas and electric fence installations are in working condition.

However, you can insert a condition into the offer requesting that the seller guarantees that the installation and accessories are in working order.

Electrical certificate of compliance – This certificate must certify that the electrical installation is safe and complies with the applicable SABS standards. This certificate may not be older than two years from issue thereof.

Are your electrics up to scratch?

Electric fence compliance certificate – This certificate must certify that the electric fence (if applicable) is safe and complies with the applicable SABS standards. This certificate is in addition to the electrical certificate of compliance.

All you need to know about your electric fence

Gas certificate – This certificate must certify that the gas installation (if applicable) is safe and complies with the applicable SABS standards.

Here’s here to comply with gas requirements

Plumbing or Water Certificate (Only applicable to properties in the Cape Town area) – A plumbing certificate guarantees the following:

  • That the water installation conforms to the National Building Regulations and the by-laws;
  • That the installation has no defects;
  • That the water meter is in a working condition and that it registers when there is water running;
  • That there is no discharge of storm water in the sewer system

Beetle Certificate (Only applicable to properties situated in coastal areas) – This certificate guarantees the absence of beetles in or on the property. It is important to ensure that the certificate includes a guarantee with regards to all beetles and not only a specific species of beetle.

Taking occupationMOving truck

The term “occupational rent” refers to the rent payable by any one of the parties that occupies the property while it is registered in the name of the other person. Under normal circumstances it will be the purchaser that will pay occupational rent to the seller when the property is occupied before registration.

There is no hard and fast rule with regard to the amount of occupational rent payable and as a result this is negotiable between the contracting parties. However, once you have agreed on the amount of occupational rent to be paid, you are bound by it.

The term “occupation” refers to the date on which the seller is obliged to transfer unhindered possession of the property to the purchaser.

If you have agreed to take occupation on a specific date in the purchase agreement you are legally and contractually bound to do so regardless of whether you actually move in on that date or not.

Next time: Estate agent commission; building plans; and FICA requirements 

¶ Contact MC van der Berg Attorneys on +27 (0)12 660 6000, email info@mcvdberg.co.za or visit their website



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