What does a sale with a suspensive condition mean?

What does a sale with a suspensive condition mean?

When a house/apartment is purchased, one or more suspensive conditions are regularly included in the contract of sale. This is actually an undertaking that depends on an uncertain event in the future. One condition precedent that is often included is, for example, obtaining a loan or a compliant electricity certificate, etc.

By including a condition precedent, an agreement can be concluded between the buyer and the seller before the condition precedent has been resolved. In other words, the effective implementation of the agreement will depend on whether the suspensive condition is realised.

When is a suspensive condition valid?

A suspensive condition is only valid if it does not depend solely on the will of the buyer or seller and if the condition is clearly defined. In other words, the suspensive condition is dependent on an as yet uncertain future event. 

Practical example: a suspensive condition is added to obtain a loan. The will is not dependent on one of the parties but on the bank. Therefore, the agreement will only be able to go through if the buyer gets a loan from the bank. If the buyer does not get a loan, then the suspensive condition has not been realized and the sale will not go through.

How long is the suspensive condition valid?

A period of validity for the suspensive condition should be added in the sales agreement. If the condition is not fulfilled by the end of this period, the sale will not go ahead.

If no term is set, it is assumed that a 'reasonable period' is kept in mind. A deadline can also be set by a justice of the peace in the event of a dispute. 

Conclusion

In the case of an agreement with a suspensive condition, the buyer or seller is expected to take action to fulfil the suspensive condition. Only then does the sale become final.