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Suspensive conditions explained
A suspensive condition is a clause that makes the sale depend on something happening. If it does not happen by the date in the contract, the sale normally falls away. The most common one is that you get a bond approved by a set date. Until every condition is met, the deal is not final, and the details in your offer decide what happens if one fails.
How a suspensive condition works
Think of it as a gate. The contract is signed, but it only takes full effect once the condition is met. The clause should say three things: what has to happen, by when, and what follows if it does not. In many offers, if the condition is not met by the date, the agreement lapses and the buyer’s deposit is refunded. Check the exact wording in your own offer, because the clause decides the outcome, not a general rule.
The conditions are there for a reason. They protect you from being held to a purchase you cannot finish, and they protect the seller by giving a clear deadline.
Common suspensive conditions
- Bond approval. The sale depends on you getting a home loan for a stated amount, on stated terms, by a stated date. This is the one most buyers meet.
- Sale of your current home. The sale depends on you selling your own property first. Sellers sometimes accept it but may keep marketing their home and accept a better offer.
- Inspection or report. The sale depends on a satisfactory inspection by a professional, for example a building or damp inspection.
- Approval from a third party. This might be the body corporate, a homeowners association or a lender.
- Sale of a seller’s property. Sometimes the seller needs to buy elsewhere and makes the sale subject to that.
What to check in the bond condition
The bond condition is the one that can cost you if you do not read it. Look at these points:
- The amount. If the offer says you must get a bond for R900 000 and the bank offers R850 000, the condition may not be met, depending on the wording. Ask what happens.
- The date. Give yourself enough time. Approvals can take longer than you hope, particularly if your paperwork is not ready.
- The effort required. Many offers oblige you to apply promptly and truthfully. If you do not apply, or you hold back information, you may be in breach.
- Which banks. Some offers say you must apply to a set number of banks. Some let you choose.
Applying to more than one bank improves your chances. A bond originator can send one application to several banks. If you use one, ask to see their credentials and check with the PPRA (the Property Practitioners Regulatory Authority). Read what a bond originator does for the detail.
Dates, extensions and deadlines
Deadlines in a property contract matter. If the date passes and the condition is neither fulfilled nor waived, the outcome depends on the offer. Some offers say the agreement lapses automatically. Others give one side the option to cancel.
If you need more time, do not rely on a phone call or a message. Get an extension in writing, signed by both buyer and seller, before the date passes. Keep a copy.
A condition that is for your benefit, such as bond approval, can sometimes be waived by you, for example if you decide to pay cash. A waiver should also be in writing, so check the clause and ask the attorney.
Steps to take
- Get pre-approved before you make an offer, so you know your limit. See home loan pre-approval.
- Collect your documents: ID, payslips, bank statements and details of your debts.
- Apply for the bond as soon as the offer is signed.
- Tell the agent and the attorney as soon as the bank responds, in writing.
- If approval looks late, ask for a written extension well before the date.
What to do next
- Check your budget with the affordability calculator, so the bank’s decision does not surprise you.
- Go through the rest of the contract with the offer to purchase: what to check.
- See where the conditions fit in the transfer process.
This article is general information for South African readers, not legal, financial or tax advice. Rules and rates change, so check your own situation with an attorney, your bank or a tax practitioner. Our property calculators can help you work out the numbers.