With legal jargon as confusing as it is, and the fact that legislation keeps changing and moving the goal posts, it's essential that we do all that we can to keep our clients up to date with legal information that can help them make informed decisions around their property investments!
Every week our lawyers (Smith Tabata Buchanan Boyes) send us great little snippets that are really useful. Here is one of them regarding the difference between occupation and possession - two fundamentally different concepts.
Many homebuyers are unaware of the legal difference between the terms ‘occupation’ and ‘possession’ of a property as used in sale agreements.
Occupation is the date on which the purchaser physically moves into the property. If the purchaser takes occupation before transfer, he is usually required to pay occupational interest (similar to ‘rental’) to the seller.
Possession, on the other hand, is associated with the legal risk of loss or destruction of the property and the legal right to enjoy the benefits associated with the property (such as rental income generated from the lease of the property to a tenant). The norm is to agree that risk will pass on date of registration of transfer, and the purchaser will usually have insurance in place from this day onwards.
Should the agreement stipulate that possession passes on any other date, it is important that a purchaser is reminded that it is necessary to insure the property from this date.
Contact us at allison@rivigangroup.com for any queries in this regard.
