Suspensive conditions and 'subject to bond approval'

A suspensive condition makes the operation of a sale depend on an uncertain future event happening by an agreed date. The offer to purchase is signed and the parties are in a real contractual relationship, so neither may walk away and deal with someone else. What is suspended is performance: the seller's duty to give transfer and the buyer's duty to pay sit dormant until the condition is met. Once it is met, the sale becomes fully operative and is treated as having been in force from the date both parties signed, not from the date the condition was met.

Not every clause labelled a condition is a suspensive one, and courts read the words in front of them. A clause that imposes an obligation ('the seller shall deliver an electrical certificate') is a term, and failing it is a breach. A clause that makes the sale itself contingent ('subject to the purchaser obtaining a bond of R1 800 000 by 30 September') is a suspensive condition, and failing it ends the deal without fault. The consequences are nothing alike.

• Bond approval for the buyer, by far the most common.
• Sale of the buyer's existing property, sometimes to a stated date, sometimes to registration of transfer.
• A satisfactory building or structural inspection, with the standard and the remedy spelled out.
• Approved building plans for existing structures, or a rezoning or subdivision decision.
• Body corporate or homeowners' association consent where the scheme rules require it.
• Consent from a third party, such as a bondholder or the Master in a deceased estate.

Most South African buyers need finance, so most offers to purchase are suspended on the buyer getting a bond. The period is not fixed by law: it is whatever the two of you wrote down, commonly around 20 to 30 days from acceptance. Much shorter puts the buyer at the mercy of a bank's turnaround time; much longer keeps the seller off the market on someone else's timetable.

Pre-approval is not fulfilment. A pre-approval certificate is the bank's estimate before it has seen the property, and the real application, valuation included, only starts once there is a signed offer. See bond pre-approval for what those certificates prove. Fulfilment means written approval, for the amount and on the terms the clause describes, delivered to whoever the clause names, by the date it names.

The buyer also has to apply, and apply properly. A buyer who submits nothing, submits late, or approaches one bank and shrugs is not simply unlucky when the date passes, and may find the condition treated as fulfilled anyway.

The agreement lapses. This surprises people, because it feels as though someone must be liable, and nobody is. Non-fulfilment of a suspensive condition is not a breach: nobody can sue for specific performance, nobody can claim damages, and no penalty clause bites. The sale is of no force or effect, both parties are released, and each is free to go elsewhere.

Any deposit held in the conveyancer's trust account goes back to the buyer. Where the offer directed that it be invested in an interest-bearing account under section 86(4) of the Legal Practice Act, the interest follows the money to the buyer, less the 5% the Act requires be paid to the Legal Practitioners Fidelity Fund. What nobody recovers is what each side spent getting there: an inspection, an attorney's review fee, weeks off the market.

A lapsed agreement stays lapsed. In Codevilla v Kennedy-Smith NO and Others the Supreme Court of Appeal confirmed in 2024 that once a suspensive condition has failed, the agreement is unenforceable and incapable of revival, however clearly the parties later behave as though it were alive. If everyone still wants the sale, they must conclude a fresh agreement that satisfies section 2(1) of the Alienation of Land Act on its own: in writing, signed by both. The seller need not sign it, and is free to reprice or to sell elsewhere.

This is the most useful rule on the page. Extend before the date passes, in writing, signed by both of you. An addendum signed the day after expiry is not an extension, it is an attempt to revive a dead agreement, and it does not work. If the bank is close but not finished, get the addendum signed while the clock is still running.

A suspensive condition inserted for the exclusive benefit of one party can be waived by that party alone. The bond clause is normally for the buyer's exclusive benefit, so a buyer may waive it without the seller's agreement, provided the waiver is clear and unequivocal, is given before the date for fulfilment, and the agreement does not forbid it. Do it in writing: courts start from a presumption against waiver, and an ambiguous message will not carry the argument later.

Waiving is a serious step, not a way of buying time. It converts 'no bond, no sale' into 'no bond, and you are in breach'. A buyer who waives is bound to produce the full purchase price without finance, on top of the transfer duty and attorney costs that already have to be found in cash rather than bonded (see transfer duty and transfer costs). Never waive on the strength of an approval you merely expect to receive.

The mirror image is a party who deliberately prevents fulfilment to escape the contract. Since MacDuff & Co Ltd v Johannesburg Consolidated Investment Co Ltd in 1924, South African law has treated such a condition as fictionally fulfilled: the obstructing party is held to the contract as though it had been met, and can be liable in damages. A seller who refuses the bank's valuer access, or a buyer who never lodges the application, is not walking away cleanly. Proving deliberate obstruction is a heavy burden, but stalling out the clock is not the free exit it looks like.

A bond approved and then withdrawn later does not undo the fact that the condition was fulfilled: the sale went unconditional on approval. Unless the clause requires the finance to stay in place until registration, the buyer is still bound, and a buyer who cannot then pay is in breach rather than released.

A resolutive condition is the reverse of a suspensive one. The sale is binding and operative from the moment it is signed, and it terminates if the stated event happens. Everything runs normally in the meantime, which is why the distinction matters: under a suspensive condition you are waiting to see whether the deal starts; under a resolutive one you are already in it, waiting to see whether it stops.

Look at the direction of the clause rather than its label. 'Subject to' and 'shall only come into effect upon' point to a suspensive condition; 'shall terminate if' points to a resolutive one. If a resolutive condition is fulfilled the sale falls away and the parties are restored to where they started, so anything already exchanged is given back.

The second most common suspensive condition is the buyer's own house, and it is the one that costs sellers most. It hands your timeline to a transaction you are not party to and cannot see. Chains collapse from the bottom, and by the time you hear about it you have been off the market for weeks. Three versions of this clause exist, and sellers routinely accept the weakest without noticing:

• Subject to the buyer's property being sold. The weakest. A signed offer on the buyer's house counts, even if that offer is itself suspended on somebody else's bond. You have inherited a chain.
• Subject to that sale becoming unconditional by a stated date. Much stronger: the buyer's own suspensive conditions must have been met, so the money behind your sale is real.
• Subject to registration of transfer of the buyer's property. Strongest for certainty, longest for time, and usually only workable when your own move is far out anyway.
• Whichever version you accept, ask to see the buyer's own signed offer to purchase: its price, conditions and dates. If their deadline falls after yours, your sale rests on a date that cannot be met.
• Pair the clause with a 72-hour clause, or you have taken your house off the market on someone else's schedule with no way back.

The 72-hour clause, also called a continued marketing clause, is the seller's counterweight. It lets the seller keep marketing after signing a conditional offer. When a second buyer arrives with a stronger offer, the seller notifies the first buyer in writing, and that buyer then has 72 hours to fulfil the outstanding conditions or waive them. If neither happens in time, the seller may cancel the first agreement and proceed with the second.

It is purely a creature of contract. There is no statutory 72-hour clause, so it exists only if written into the offer to purchase, and its wording settles every question that will actually arise. Whether the 72 hours run in calendar hours or exclude weekends and public holidays varies from agreement to agreement, and so does the quality the competing offer must have: some clauses demand a fully unconditional second offer, others merely fewer conditions or a higher price. Read your own clause.

It cuts both ways. A seller who serves the notice before the second buyer is properly committed can lose both deals, so give notice only once that offer is signed by both parties and its funding is real. A buyer receiving one should be clear about what 72 hours permits: it is nowhere near long enough to get a bond granted, so the notice forces a choice between waiving the condition, which means finding cash, and losing the house. If you genuinely need the finance, negotiate the clause out or negotiate a longer notice period before you sign.

Suspensive conditions are the most common reason a South African sale falls over, and almost all of the damage traces back to wording nobody read closely. Have a conveyancing attorney review the conditions before you sign; it costs a fraction of a collapsed transfer. This is general information, not legal advice, and your answer turns on the exact words in your document.