Waiving the Bond Clause to Keep a Sale Alive: Risk Versus Reward [an extract from an article by: Jardim Bekker Inc – September 2024 Newsletter]
A “bond clause” – standard in most property sale agreements – typically provides that the whole sale depends on the buyer obtaining a mortgage bond by a specified date. If the deadline comes and goes without a bond being granted, the sale lapses and the buyer is entitled to get their deposit back.
Most agreements also provide that the bond clause is there for the sole benefit of the buyer, who is thus entitled to waive it, i.e. to tell the seller “I no longer need a bond and I’ll pay the purchase price in cash so the sale can proceed.”
There’s both risk and reward in that
The rewards in such a situation are obvious – both buyer and seller benefit from the sale going through.
But there’s also a risk factor if the “waiver” is open to doubt, as a recent SCA (Supreme Court of Appeal) fight illustrates.
The Original, Full article can be Viewed here: → https://tinyurl.com/dp3rfcxz