Residential property sellers increasingly
using the Acceleration Clause

The very high demand for properties in certain choice South African residential areas has seen an increasing use of a clause sometimes referred to as the “72-hour cause”, but more correctly called the Acceleration Clause. According to Wayne Albutt, Regional Sales Manager for the Rawson Property Group in the Western Cape, this clause is inserted into Agreements of Sale if a buyer’s Offer to Purchase is conditional on him either getting a bond or selling his current home, and the seller is confident that he will receive further offers for his property.

The clause enables the seller to accept the initial Offer to Purchase but to go on marketing his property. If a further, unconditional offer, eg a cash offer, is received, the initial purchaser will be given three days (72 hours) from a specified date to secure his or to sell his home, failing which his offer is no longer valid, unless the suspensive conditions are waived. This acceleration of the suspensive condition, says Albutt, can very often be achieved if the seller has a good bond originator or a close relationship with their bank (in the case of a bond). In general, however, bond approvals take longer than 72 hours, so the chances of the offer expiring are high.