The use of the 72-hour clause has recently become more common in the South African residential property market because middle-class consumer buying power is being reduced and property buyers are more often failing to meet all their buying conditions.
This is according to Rowan Alexander, Director of Alexander Swart Property, who says when applying for bonds, people are increasingly found to have credit lapses or court judgements against them, and in nine cases out of ten these nullify their chances of getting the loan they need.
“The 72-hour clause is designed to accelerate the progress of a house sale. If the first offer accepted comes with suspension conditions (e.g. the obtaining of a bond or the selling of the buyer’s existing home) which have to be met before the sale of the property can go through, it may take days or even weeks for the condition to be fulfilled,” says Alexander.
“In these circumstances, the seller who has received another satisfactory offer is entitled to give the first accepted offer 72 hours of business/working day time to fulfil their conditions. If the buyer cannot do this, the contract is automatically void.”
Alexander says some buyers sign a deed of sale offer without knowing that this clause can be applied. When it is brought into force, they can be thrown into a panic as they try to in a very short space of time to meet the contract conditions.
Nevertheless, Alexander says the 72-hour clause is a useful one, and is the only means of being fair to both buyer and seller.
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