Does occupational rent include the water and lights bill?
Occupational rent is the financial compensation when the purchaser of a property occupies the house he or she has bought before it is registered in his or her name. There are two schools of thought when it comes to utilities.
For instance where an offer to purchase stipulates that occupation will take place on 1 February 2017 and the occupational interest will be R10,000 per month, but is silent regarding the payment of water and electricity (utilities), it is often unclear whether the purchaser will pay those amounts over and above the occupational rent.
The first school of thought argues that the occupational rent as agreed on in the contract of sale does not include utilities. If the parties agreed on R 10,000 occupational rent, the utility account must be paid by the purchaser over and above the R10,000 occupational rent due to the seller.
The second school of thought argues that when the contract does not specifically address the issue, the utilities are deemed to be included in the occupational rent. The R10,000 must then be used to settle the water and electricity accounts at the municipality and the remainder will be payable to the seller as occupational rent.
To avoid unpleasantries between the parties the agent should ensure that the contract provides for the payment of utility accounts in addition to the occupational rent during the occupational period.
Who is Tiaan van der Berg?
M.C. (Tiaan) van der Berg, BLC LLB LLM (UP) H. Dip Labour (UJ) Dip ADR (AFSA/UP), is an admitted attorney, conveyancer and notary, and the founding director of M.C. van der Berg Incorporated, a legal practice specialising in property law. He is also the co-director of Mcademy Training Institute.