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What does it mean if my sale agreement / offer to purchase contains a suspensive condition/s?

The two most common examples of a suspensive condition in a sales agreement are as follows:

1. This agreement is subject to the Purchaser obtaining a bond in the amount of  R 500 000.00 on or before 12 December 2022;

2. This agreement is subject to the Purchaser selling his / her property known as Erf 1234 Sandton for a minimum amount of R 800 000.00 on or before 12 December 2022;

The keys words are…this agreement is subject to…which means that in the event of the above suspensive conditions not taking place by 12 December 2022, the agreement is not enforceable and is null and void, the Seller and Purchaser walk away, neither party has any recourse against the other, no agents commission is payable, and no transfer fees are due. 

It is therefore important for Purchasers to note that should they make payment of a deposit in terms of the agreement and the agreement is subject to a bond grant or subject to the sale of their existing property, and the Purchaser, despite their best efforts, fails to obtain bond approval or sell their property, their deposit is refundable in full, as the sale agreement is void.

However, what happens in a situation where a Purchaser obtains bond approval for a lesser amount, i.e R 400 000.00 and not R 500 000.00? Or Purchaser obtains an offer on their property for R 700 000.00 opposed to R 800 000.00? When a Purchaser finds themselves in this position the Purchaser has the opportunity to either waive the suspensive condition or not proceed with the agreement.  

How and when can a Purchaser waive the suspensive condition in the sale agreement? 

In the case Eloff & Another V [2008] JOL 21331 (C), the court set out the requirements for a valid waiver, namely:

1. The waiver of a condition must occur before the due date for the fulfilment of the suspensive condition (in the example above the date of waiver needs to be prior to 12 December 2022)

2. Each Purchaser to the agreement must waive the suspensive condition; 

3. The waiver must be unequivocal and in writing;

4. The waiver must be contained in an addendum and signed by both parties.

A common and simple waiver clause will read as follows:

The Purchaser hereby waives the suspensive condition that the offer is subject to the sale of the Purchaser’s property for a minimum amount of R 800 000.00.

Signed at Johannesburg on 10 December 2022
Purchaser: …………………………..

It is therefore vital for parties to note if their sale agreement is subject to any suspensive conditions in order to know when and if the sale of the immovable property has come into full force and effect and therefore enforceable as well as how and when to waive a suspensive condition in order to enforce the sale agreement where the suspensive conditions have not been met.