A real estate purchase follows a series of steps. The signing of the final sales deed is only the last stage of a process that begins with an agreement between the buyer and the seller on the purchase price of the property. This agreement is formalized in a preliminary contract known as a sales agreement. Drafted by a notary, this document includes several mandatory elements. It is generally considered legally binding, meaning the sale is deemed completed. The only event that can nullify the transaction is the non-fulfillment of one of the suspensive conditions outlined in the agreement.
What Is a Suspensive Condition?
In Morocco, as in France, a sales agreement can include one or more suspensive conditions. These are events that must occur for the sale to be finalized. Their fulfillment must not depend on the will of either party; otherwise, they would be considered potestative conditions.
The fundamental characteristic of a suspensive condition is that neither the buyer nor the seller can revoke it at will. Its realization or non-realization depends on external factors beyond their control.
The Mortgage Suspensive Condition: One of the Most Common
If the buyer is financing the purchase with a mortgage loan, the sales agreement in Morocco must include a suspensive condition related to credit approval. This means that the final sale can only proceed if the buyer secures a loan from a financial institution within a specified timeframe. Since loan approval depends on the decision of a third party (the bank), the buyer has no direct control over it.
If one or more banks deny the mortgage application, the sales agreement becomes null and void.
However, the property cannot immediately be put back on the market; the seller must wait for the buyer to formally withdraw from the purchase within the deadline set in the agreement.
This suspensive condition serves as a protection for the buyer, ensuring they are not legally bound to purchase the property if they cannot secure financing. It is essential to set a reasonable timeframe, typically two to three months, to allow the buyer to prepare their application and approach multiple lenders.
Other Suspensive Conditions in a Moroccan Sales Agreement
Beyond the mortgage loan condition, a sales agreement may also include a suspensive clause related to obtaining a building permit. Again, the approval or denial of this permit is beyond the control of both the buyer and the seller.
Other possible suspensive conditions include:
- No preemptive rights exercised by a tenant or a local authority.
- No easements that would restrict or complicate the property's use.
- and more
Suspensive Conditions in a Moroccan Sales Agreement: Key Takeaways
- A suspensive condition is an event that must occur for the sale to proceed, and its outcome is beyond the control of both the buyer and the seller.
- If the buyer requires a mortgage, a credit approval suspensive condition is mandatory. This clause allows the buyer to withdraw from the agreement without penalty if they fail to secure financing within the agreed timeframe.
