FINANCE
suspensive conditions not being met , the contract falls away , and they will get their deposit back .”
Examples of suspensive conditions can include the requirement for a buyer to conduct a home inspection in a timely manner and be satisfied with the outcome , for example , checking the roof structure . The most common suspensive conditions are the requirement for the buyer ’ s financing ( home loan ) to be approved and the requirement that the buyer ’ s current property be sold first . This is known as a “ subject to ” sale .
“ Buyers are strongly recommended to consult with a lawyer when including suspensive conditions as these are there to protect the buyer to make sure they are ready to fully commit .
Having those suspensive conditions in place can protect your deposit . The last scenario is the seller breaching the contract , for example , breaching a warranty . Cancellation might not be the only remedy for the home buyer . However , if the home buyer can cancel because the seller breached the agreement , the home buyer will be entitled to their deposit back . Your deposit is safe should the seller not fulfil their obligations .”
Reason a Sale may fall through
Instances where the buyer can forfeit the deposit if the sale falls through include : 1 . When a buyer deliberately withdraws their home loan application . “ Regardless of if the home loan is approved or not , withdrawing an application is a breach of contract if a home loan is needed to finance the purchase .” 2 . Buyer ’ s remorse .
“ A buyer may get cold feet and choose to pull out after signing , without a legally permissible reason .” 3 . No attempt to meet suspensive conditions .
“ While suspensive conditions are intended to protect the buyer , they will forfeit their deposit if
46 MARCH / APRIL 2023 SA Real Estate Investor Magazine