Question posted in the General Law category relating to Gauteng
On the 10th of December we submitted an OTP for a property. In the OTP it states that "the agreement is subject to the Purchaser being able to obtain, within 30 days of signature a loan for the full amount."It also states that "Only in the event of a loan approval not being granted (for the full amount) will the suspensive condition not be herein be deemed not to be fulfilled and the agreement will lapse and terminate automatically and become null and void"
In December Bank A approved a loan, but only for 90% of the purchase price.
Bank B yesterday approved a loan for the full amount, but at a higher interest rate. But this is obviously after the 30days lapsed.
We do not wish to proceed with the transaction. And if I understand this correctly, the 30days lapsed without us getting finance for the full amount, (even though we got finance for the full amount later), meaning that the contract is null and void?
Answer to the Question
Hi there and thank you for your question,
I am a practicing attorney based in South Africa and I will assist you with your question. Please feel free to ask as many follow-up questions in order to clarify your question. If you have a new question, you must please open a new thread.
If Bank A approved a loan for less than the full amount, then that can't be seen as a fulfilment of the suspension condition.
If the suspension condition had not been fulfilled within the 30 days of signature, then the agreement is automatically null and void and is of no further force or effect. In law, it is dead. You can't bring it back to life. If the parties want, they can sign a new agreement. But the old agreement is throw away.
If Bank B approved a loan for the full amount after the 30 day period, that action means nothing. Because the agreement is already null and void, Bank B's actions can't be seen as a fulfilment of the suspension condition.
You are 100% correct in your reasoning, as stated above.
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