Suspensive Conditions - Sale of Second Property
Category Market Advice
Suspensive Conditions - Sale of Second Property (Subject To Sale)
Article Provided by Leanne Jooste, B Law Inc. Attorneys
What is a suspensive condition?
It is a clause included in an Offer to Purchase that states that a specific event is to happen before the Offer to Purchase is of full force and effect and binding on all parties.
Suspensive Condition - Sale of Second Property
This condition is to the benefit of the purchaser. This is a clause included in the Offer to Purchase that states that the Offer to Purchase is subject to and conditional upon the sale of the purchaser's property by no later than the conditional sale date set out in the Offer to Purchase. This is also referred to as a "Subject to transfer."
This means that the Offer to Purchase only comes into full force and effect as soon as the purchaser has sold his property, being the "second property."
The current property and the purchaser's property (second property) will need to be registered in the deeds office simultaneously or the purchaser's property transfer has to be registered prior to the current property transfer.
If this condition is not fulfilled by the expiry date, then the Offer to Purchase will lapse and will be of no force and effect.
The seller may continue to market the property until this suspensive condition has been met. Should the Seller receive a competing offer from another party, the seller can call on the purchaser by notice in writing, to waive the condition within a certain period (normally 72 hours) after delivery of notice. The notice shall include a copy of the competing offer.
If the purchaser fails to waive the condition in the Offer to Purchase, the Seller can proceed to accept the competing offer and the current Offer to Purchase on the property shall lapse and be of no force and effect.
If the seller does not accept the competing offer, then the current Offer to Purchase is still valid and the transaction can still proceed.
De Lucia Group has been servicing the property industry for over 45 years. Contact us to ensure you get the best advice for all your property-related queries. Michael De Lucia - michaeldl@delucia.co.za
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The information contained herein is not intended to constitute advice and shall only be relied upon by you at your own risk. De Lucia Group does not guarantee the accuracy or completeness of any information posted in this newsletter or otherwise. Any information relied upon by you should be independently verified for accuracy. De Lucia Group reserves the right to change the content distributed or published without prior notice.
Author: De Lucia Group
