Most offers to purchase property contain suspensive conditions protecting the Purchaser in the sales agreement.
Examples of suspensive conditions protecting the Purchaser:
But what about the Seller's protection in the sales agreement? There is always uncertainty whether the Purchaser will be able to meet the suspensive condition(s).
A suspensive condition is an uncertain future event. The Offer to Purchase is thus subject to the fulfillment of this uncertain future event.
Should the Purchaser fail to comply with the suspensive conditions pertaining to the specific offer within the allotted time frame, the Offer to Purchase becomes null and void and is of no effect.
Having to remove the property from the market for an extended period, places the Seller in an unfortunate position, and the “continued marketing” clause has been introduced to alleviate this disadvantageous situation.
The “continued marketing” clause, better known as the '72 hour' clause, provides the Seller with the opportunity to accept other, similar or better, unconditional offers on the property for sale.
In practice, when this occurs, the Seller is obligated to give the Purchaser written notice that he or she has received a similar or better unconditional offer. The Seller must indicate a willingness to accept this competing offer.
In the written notice the Seller must indicate to the Purchaser that he or she has a period of 72 hours from receipt of the notice to waive the suspensive conditions applicable to the first Offer to Purchase or to comply with all the suspensive conditions within the 72-hour period.
Should the Purchaser not waive the suspensive conditions applicable to their Offer to Purchase or not comply with the conditions within the 72-hour period, the contract between the parties will become null and void and be of no effect.
The Seller will then be in the position to accept the other offer.
Should the Purchaser waive the suspensive conditions, the Offer to Purchase will immediately become a legally binding document and the Purchaser must perform as per the Offer to Purchase.
An example can be as follows:
Sellers should be alive to Purchasers who do not have the financial means to make unconditional offers. In some cases the Seller and Purchaser are equally uneducated in the workings of property transactions to make and accept such offers.
Sellers must also be aware that there are other aspects, notably the wording of the “72 hours” clause, that may occur..
It is recommended that Sellers appoint a legal professional to assist them with their property transactions who will be able to give them the necessary assistance and guidance.
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