WHY A '72 HOUR' CLAUSE?
The '72 hour clause' (or 'continued marketing clause') is somewhat of an enigma for a first-time buyer or seller and we therefore explain here how it works. It is important to consider the exact wording of the ’72 hour’ clause in each and every sale agreement, as these clauses do vary from one agreement to the next.
Essentially, by inserting such a clause in a property sale agreement and signing it, the seller and purchaser indicate their agreement that the seller may, within a certain window period, accept an offer to purchase the property from another bona fide buyer.
Such a clause is often applied in instances where the agreement between the seller and purchaser is conditional (suspensive condition) upon the purchaser securing a bond or selling his/her property. In other words, the purchaser is granted a certain amount of time in terms of the agreement within which to obtain bond approval or to sell a property, failing which the sale agreement will fall away. A '72 hour clause' serves to protect the seller’s interests in such circumstances as he may continue to market the property during the (often) protracted and uncertain period in which the fulfilment of the suspensive condition(s) is awaited, in the hope of finding a better offering – be it a cash buyer (offer not subject to any suspensive conditions) or even a higher purchase price. Once another buyer makes a better offer, the 72 hour clause is activated and the first purchaser is given 72 hours to waive the suspensive conditions in his/her offer or meet the offer made by the second purchaser. If he is unable to do so, the seller may then cancel the agreement with the first purchaser and proceed and enter into an agreement with the second purchaser, the first agreement becoming null and void.
The 72 hour allocation is not set in stone, and parties may agree to make it any period of time. It has however become practice, in such instances, to limit it to 72 hours.
For more information, contact us on 041 363 6044 or email us at firstname.lastname@example.org.