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How to validly extend the period for getting
your home loan approved

May 2018

“I’m trying to buy a house. The purchase agreement is subject to the condition
that I obtain a mortgage bond within 30 days. My time is running out but I’m
close to getting the financing approved from my bank. I just need a few more
days. Is it possible to extend the 30-day period and if so by when must this be
done? I really don’t want to lose this house!”
Most property sale agreements contain a suspensive condition that makes
the purchase subject to the purchaser obtaining financing within a certain
period of time. To understand whether this period of time can be extended, it
is important to firstly understand what such a condition, commonly termed a
“suspensive condition”, is.

A suspensive condition in a deed of sale suspends the operation of the rights
and duties of the parties flowing from the contract until the fulfilment of an
uncertain future event. Typically, such fulfilment of an uncertain future event
would in your case be the approval of the mortgage bond by a financial
institution. In the event that the mortgage bond is not approved within the set
period of time, the suspensive condition would not have been met, and in terms
of our law, the contract of sale will be of no force and effect. But, can you extend
the period of the suspensive condition as you are suggesting and if so, by when
must this then be done?
Property In the recent High Court case of Abrinah 7804 (Pty) Ltd v Kapa Koni Investments

CC the court was faced with this exact question. The parties concluded a
deed of sale in which the purchaser was afforded a period of 6 months to
obtain a mortgage bond, which the purchaser then failed to do. The seller
subsequently addressed a letter to the purchaser after the expiration date of
the suspensive condition providing an extension of a further 14 days to comply
with the suspensive condition. The court held that an agreement, subject to a
suspensive condition, automatically falls away when the condition is not fulfilled
by the expiration date as no contract remains. Accordingly, nothing can be
done after the expiration date and no extension can happen after the fact as
no contract exists.
In your case, extension of the expiration date is therefore possible although it
should be noted that the seller is under no obligation to do so. Such extension
must happen prior to the expiration date as thereafter no contract will exist. If the
expiration date has passed, but the seller still wishes to continue with the sale,
the only way the situation can then be remedied is to conclude a new contract
on the same terms as the expired contract. It is also important to read the entire
contract and follow the correct procedure to extend the suspensive condition.
Some contracts may have a clause, which determines that any extension and/

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