Rental Edition: What is Occupational Rent

By Justina Hamupembe March 17, 2023

Occupational rent applies when buyers move into a property before transfer and registration have taken place. It can also apply when sellers remain in occupation of the property after transfer and registration. 

The practice is a form of financial compensation for the use of a property that one doesn’t own and is designed to protect both buyers and sellers. It applies equally to freehold and sectional title purchases—whether you are buying from an individual or a developer—and should be carefully considered and negotiated before you sign an agreement of sale.

Inserting an occupational rental clause in your sales agreement is advisable to reduce the risk of any ambiguity during the transaction and to have a clear guideline as to what each party is entitled to and what they are responsible for.

This clause is often overlooked because the majority of buyers only plan to move into the home once transfer has happened. In most instances buyers want to avoid having to pay occupational rent and therefore wait for the property to be registered in their name before taking occupation. However, it is always prudent to plan for all scenarios and ensure that you have made the necessary arrangements should there be any delays in transfer. 

Payment of occupational rent often causes disputes between buyers and sellers which have caused many sales to fall through. Although payment of occupational rent is a standard clause in most property sales contracts, there is often confusion about what each party is responsible for or when occupational rental payments should start.

As with any contract, it’s important to understand all the implications before signing any documents.If you have any doubts, ask a reputable estate agent to advise you or have your attorney review the documents before signing a legally binding agreement with potentially serious financial repercussions. 

In conclusion,  It's easy to get caught up in the excitement when you buy or sell a home, but always remember  well composed sale agreement is meant to ensure that everything goes smoothly , which will make the entire process of buying or selling a home a far less daunting one. 

For enquiries text, call or email #yourhomegirl Justina Hamupembe

Cell: +264812726001

Email: This email address is being protected from spambots. You need JavaScript enabled to view it. 

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Last modified on Sunday, 19 March 2023 16:38

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