When the time comes to sign an offer to purchase, certain elements of the sale may be outside your control. This happens when you must sell your present residence or if you must obtain a hypothecary loan before purchasing the new property.
There are other intangibles, such as not having the information on hand to carry out a due diligence verification before the purchase.
To insure that you are not taken by surprise, the offer to purchase should be conditional to:
For these conditions to be effective, you must include escape provisions in the offer to purchase, such as conditions precedent allowing the purchaser to withdraw its offer, if appropriate;
To avoid these provisions becoming the subject of interpretation, they should be drafted precisely and adequately. They should also provide a sufficient period of time to allow you to react before they expire.
Conditions precedents (suspensive conditions) are those dealing more particularly with:
The offer to purchase should also be conditional upon completing various verifications to your satisfaction, more particularly:
Once the conditions precedents (suspensive conditions) have allowed you to complete your verifications to your entire satisfaction and they have been lifted, for example following obtaining a hypothecary loan, the satisfactory review of the various registers of the co-ownership or receiving an acceptable inspection report, you may proceed with the transaction in full knowledge of the facts.
On the contrary, if one of the conditions of the offer to purchase is not satisfied, all your undertakings will become null and void. The parties will be released from their obligations and you have the right to ask for the refund of your deposits.
WHAT YOU SHOULD KNOW! When buying an apartment in a co-ownership, very few purchasers have the funds for a cash purchase. They will need to obtain a hypothecary loan from a financial institution. For this reason, your promise to purchase should be conditional to obtaining such a loan. The loan should not be conditional to additional terms and conditions and for a higher rate of interest than the predetermined conditions.