• Brandon Boonzaier

What Are Suspensive Conditions?

This is a question that I've answered in a video a long time ago, but I recently did a new one and so it's time to do a FRESH blog too :)

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Here is the simplicity...


A suspensive condition is a clause (more on that soon) that is in a sale agreement when a property gets sold.


Any time a property gets sold, it's got a contract called a sale agreement, and in there is a clause called suspensive conditions.


A clause is just a part of a contract that has specific agreements on a specific subject.


There can be a clause for how much money you are buying the property for and a clause that says the seller has to do inspections for safety on the property, for example.

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So let's figure out what a suspensive condition clause is.


The word suspensive comes from the word suspend. Suspend means to hold up in the air. If I'm suspending something, I'm holding it up.


A condition is something that has to happen in order for a contract obligation to be fulfilled.

EXAMPLE....


If it's a condition that I eat all my food before I get dessert, then I've got to eat it up before I get dessert.


Now in a sale agreement you may have a clause which says, "You must do this before the sale goes ahead. Unless you do it, the whole contract doesn't go ahead."


"We're holding up (suspending) this condition, it's suspensive, and you've got to do it."


This is a suspensive condition!


So let's get a couple of examples and then you'll get what I mean.


Let's say that a seller put in a sale agreement, "I will sell you my house, ONLY if I first find another house for me to live in, and I have one month to do it. If I don't find another house for me to live in within a month, I can tear up the sale agreement and you can't do anything about it because we agreed that I have a month to find a house. And if I don't find another house, we have no agreement."


That would be in the sale agreement as a suspensive condition.

It holds everything up for one month or until it gets done.


Another example could be you are buying a property and you write in there, "Unless I get money from the bank (a bond) within 2 weeks, this property sale doesn't go ahead."


So now you have no contractual pressure on you, because you have two weeks to get a bond. If you don't get the bond, no deal and everyone's ok with that and the sale agreement is no longer going ahead.

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But if you DO get your bond, the suspensive condition has been met, and the sale agreement goes ahead.


So there are two examples of what kind of things can be held up by suspensive conditions.


I gave you two different examples, from the seller's point of view and from the buyers, but there can be others of course.


I hope that helps and clarifies the idea of suspensive conditions, and it's something that you can put in to your sale agreement or look out for if you're ever working with a sale agreement.


For more...

Please have a look at the video below.


Thank you for reading, and looking forward to getting you Your Money. Now


Gal Ezra,

Managing Director,

Empower Funding


021-140-3540

info@empowerfunding.co.za


Learn more about our bridging finance service. Subscribe to our YouTube channel.



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