When signing an offer to purchase for a new property, one of the questions the agent will ask you is when you would like to take occupation. Many buyers opt to take occupation on registration of the property into their name but this is not always the best option. In fact there are benefits to taking occupation before transfer.
Some sellers and agents prefer the safety net of only handing over the keys on registration, knowing that the full purchase price has been paid into the attorney’s trust account. However when a buyer takes occupation before registration they must pay occupational rent to the seller, which does provide some financial stability for the seller.
Benefits of taking occupation before transfer
Set Date for Better Planning
By choosing to take occupation on transfer, you accept that there is no way to perfectly pinpoint a moving date. There may be delays at the Deeds Office that set you back anything from days to weeks to months. By taking occupation on a specific date as opposed to on transfer, you and the seller can better plan your lives. You are able to plan your move and reduce stress and uncertainty.
Speeds Up The Transfer
When there is an agreed upon occupation date, the purchaser is more motivated to pay any deposits and fees faster to reduce the amount of occupational rent they must pay. The seller will also be more likely to satisfy all suspensive conditions and pay any fees sooner in order to receive their money faster. This in turn, speeds up the entire transfer process. When a purchase, especially, drags their heels with payments it significantly pushes back registration.
A Chance To Discover Defects
Property sellers are required to disclose any defects to the agent as per the compulsory Property Condition Disclosure. If sellers have repaired all the defects to a satisfactory standard, this will speed up the transfer process. If a buyer moves in prior to transfer and finds defects that were undisclosed, they are within their rights to request they be repaired or that the sellers cover the cost of repairs. This can delay the transfer. The risk of sellers not disclosing all defects is minimized when occupation is likely to take place before registration as they will aim to avoid any roadblocks to transfer.
Do you need a property bridging loan to cover occupational rent and fees? Apply now for a property bridging loan and get a portion of your sale proceeds early.