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Thread: Seller in breach of otp

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    Seller in breach of otp

    Hi.
    I am currently trying a purchase a property. I have taken occupation since august 26, and only after doing so, summons was delivered that the owner must attend high court for not paying his bond. We signed otp in June and had finance approved with condition that the building plan needs to be approved before bank lifts retention of funds. A clause also stipulated in otp is that the seller will continue to pay bond until transfer. What can I do in order to enforce that clause or use his breach of contract to re-negotiate paying occupational rent as now due to city council delays, the transfer attorney is instituting a clause for occup rent to be increase to 1% of purchase price.

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    Diamond Member HR Solutions's Avatar
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    A clause also stipulated in otp is that the seller will continue to pay bond until transfer.
    This is normally the case tho. A seller has to settle his bond for the bank to release the house to the buyer.

    What can I do in order to enforce that clause or use his breach of contract to re-negotiate paying occupational rent
    The seller having to pay his bond is not the same as occupational rent. You would need to pay occupational rent even if he didn't have a bond.
    Usually the occupational rent has a clause in it that the it would go up after a certain period if the transfer has not gone thro, but in this case it does not seem to be you delaying the transfer ..... or is it ?
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    Site Caretaker Dave A's Avatar
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    Is there a period set within the contract within which time the building plans must be approved?
    What happens if the building plans are not (or never) approved?
    The trouble with opportunity is it normally comes dressed up as work.

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    There is a clause that rent will go up, but I am not delaying anything. The understanding was that the agent will do the work to get plans approved, and I will pay costs for it. I understand that occupational rent must be paid, but I will also seek legal advice to claim penalties back due to seller not paying bond which led to property being attached. Between agent and myself we have requested from bank and attorney handling the case on behalf of bank to cancel auction - which has been done for now.

    There is no set period to get plans approved, but loan amount is on retention by bank until plans are approved, so if it does not get approved the bank wont allow deal.

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    Platinum Member sterne.law@gmail.com's Avatar
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    Two possibilities.

    One - Talk to the bank to but it from them
    This will probably be less than what your first offer is.
    Cancel contract for breach.

    Alternatively - just wait for teh auction and hope you can buy for less tahn what you have financing for (but a deal with the bank is better)

    Two
    Talk to bank to hold sale off.
    Pledge your finance to them (so they get their money which they anyway would have got)
    Seller agrees that occupational rental goes to bank.
    As to costs/damages - perhaps excess of sale price less bank payment portion can be held in trust pending a resolution.
    Anthony Sterne

    www.acumenholdings.co.za
    DISCLAIMER The above is merely a comment in discussion form and an open public arena. It does not constitute a legal opinion or professional advice in any manner or form.

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