Real Estate Investor Magazine South Africa Real Estate Investor Magazine - May 2017 | Page 10

Q & A PROPERTY ADVICE Q I have signed a Deed of Sale which says that I take occupation and possession of the property on 1 May, however, the date of transfer is only on 1 June. Is there a difference? M NICCI DU PLESSIS DU PLESSIS & CURRAN ost certainly, there is a big difference. Occupation means that you receive the right to live in the property for the month before transfer into your name, for which you will be charged an agreed occupational rent. All the risk in the property remains with the Seller, who remains liable for rates and taxes, insurance and maintenance. Possession means that you receive the right to live in the property, pay occupational rent, collect rental income (if there is a tenant) and enjoy all the benefits of being an “owner”. However, you also receive all the risk too, for example, payment of rates and taxes, insurance and maintenance. If the property were to burn down mid-May, you will have to take transfer on 1 June of a razed shell and still pay the full purchase price to the Seller. Hopefully you would have been advised of the legal distinction of possession and insured the property from 01 May. You would then recover funds from the insurance company to rebuild the property. There is no recourse against the Seller or any way in which you can resile from the contract on this basis. I have seen many deeds of sale that unfortunately link these two concepts in a single clause – it is therefore imperative that, if you want to move into the property before it is registered in your name, you only agree to taking occupation and paying occupational rent. Risk will then transfer on registration when you are the owner of the property – why would you agree otherwise? Q Why is property a choice asset for building wealth? I ADRIAN GOSLETT REGIONAL DIRECTOR AND CEO OF RE/MAX OF SOUTHERN AFRICA n short, it is more predictable than other wealth vehicles. Looking back over the last 30 years we see that the property market has always followed a fairly predictable cyclical pattern of boom and bust periods. Based on this evidence, it inevitable that a boom period will follow on from a slow housing market. The opportunities that investors take advantage of in the slower market will benefit them during the next boom period, much like during the Great Depression and the time that followed, which was 75 years of straight real estate appreciation in the US. Those investors who had the foresight to buy property while the market was still recovering saw a good return on their investment once the market had reached the point of full recovery and was flourishing. Property investment will always remain a sound option over the long term. The secret to building wealth through real estate is no secret at all. See property as a long term investment, and, if possible, hang onto the property or buy during the lows and sell during the highs. BUSINESS I FAMILY I PROPERTY We look after your interests Unit 12, Harfield Village Centre, 48 2nd Ave, Claremont, 7708 Mobile: [phone] Email: [email protected] www.duplessiscurran.co.za