In the context of the sale and purchase of immovable property, a 72-hour clause is an important and increasingly common component of an effective and comprehensive sale agreement. At the heart of this clause is a key objective: To secure the seller’s interests.
Also known as a ‘continued marketing clause’, a 72-hour clause permits a seller to continue marketing a property, even after accepting a valid offer, until all suspensive conditions of the existing agreement have been met. Often, the clause is applied in instances where the sale is subject to the purchaser securing mortgage bond approval from a financial institution – or selling their own property – to finance the transaction.
Generally, a purchaser is given a certain time period in which to fulfil a suspensive condition failing which the sale agreement will lapse and be of no further force or effect. Depending on the wording of the agreement, a suspensive condition may take weeks or even months to fulfil. During this period, the seller risks missing out on a better offer.
To prevent delays and maximise available marketing opportunities, a 72-hour clause enables a seller to accept an offer from a second purchaser during the interim. Although the wording of this clause varies from agreement to agreement, it generally requires a seller to notify the first purchaser in writing that they have received a second unconditional offer, which they wish to accept.
From the date of receipt of notice, the first purchaser has 72 hours – excluding weekends and public holidays – in which to waive the suspensive condition(s). If the first purchaser fails to do so, the seller may cancel the agreement and proceed with the second sale.
It is thus critically important that prospective sellers incorporate a carefully worded 72-hour clause in their sale agreements.
Are you thinking of selling your property? You need a clear, watertight sale agreement that secures your interests and minimises the risk of delays and disputes. For sound legal support, contact us at info@stbb.co.za to consult with a property law attorney today.
This content is the property of STBB. We encourage the sharing of our content for informational purposes. However, if you wish to copy or reproduce our content on your own platform or website, please ensure that proper credit is given to STBB.
