In a property transfer, it is financial compensation (rent) payable by the person occupying the property, who is not the owner of the property.
It protects both the Seller and Purchaser by providing certainty and fairness in cases where the property transfer does not go completely as planned or when an earlier or later occupation date is agreed.
How is it calculated?
The amount is generally agreed upon in the agreement of sale and is usually equal to the amount the property can be rented out for (market-related value). In most cases, this will equal about 1% of the purchase price. The rates and taxes for the property remains the responsibility of the registered owner, unless the contract stipulates otherwise. Similarly, utility charges such as electricity, water and levies, can be negotiated by the parties in the contract.