May 28 2018
Risky To Confuse Occupation and Possession
Posted in Uncategorized
Many home buyers 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 transfer and the purchaser will usually have insurance on the place from this day onward. 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.
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