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ARTICLE · 01 APRIL 2014

Residential Property Finance Clauses

ClarkeKann Lawyers
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Property agents would be aware the standard REIQ Contract contains a finance clause which makes the contract conditional upon the buyer obtaining finance.

AustraliaReal Estate and Construction
Paul O'Dea
Paul O'Dea
Matthew Armstrong
Matthew Armstrong
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Property agents and developers would be aware the standard REIQ Contract contains a finance clause which makes the contract conditional upon the buyer obtaining finance. This is for the mutual protection of the parties, in that either party may elect to terminate the contract should the condition not be satisfied.

Despite this, a common fear exists among sellers that the inclusion of a finance clause may offer buyers an excuse to terminate a contract if they no longer wish to proceed. Whilst it is true a buyer may terminate a contract if they fail to obtain finance by the approval date, a buyer is required to take all reasonable steps to obtain finance and must demonstrate substantial evidence in support of same. This requirement is construed strictly by the courts.

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