Most property buyers (and agents) understand that a suspensive condition is a clause in the Offer to Purchase (OTP) that suspends the agreement until a certain condition is fulfilled.

Common examples include “subject to bond approval” or “subject to the sale of the purchaser’s existing property.”

These clauses protect parties from being legally bound when the key requirement - like finance approval - has not yet materialised. But when it comes to the “subject to building inspection” clause, things get far trickier.

The Problem With “Subject to a Satisfactory Building Inspection”

Many OTPs include a vague condition like this:

“This offer is subject to the purchaser obtaining a satisfactory building inspection report.”

While it sounds reasonable, in legal terms this is dangerously open-ended. Why? Because the clause leaves everything - the definition of “satisfactory,” the process, and even the timing - up to interpretation.

Without clear parameters:

• The buyer can simply claim dissatisfaction (for almost any reason) and walk away.
• The seller has little recourse, since the clause gives the buyer a subjective escape hatch.
• If a dispute arises, the contract could even be found void for vagueness, as courts cannot enforce something that has no objective standard.

Essentially, this clause can turn a binding offer into a non-committal “try-before-you-buy.”

What Should Be Included Instead

A properly drafted clause should remove ambiguity and make it clear:

• When the inspection must be done,
• By whom,
• What constitutes a material defect, and
• How the parties should proceed if defects are found.

For example:

“This offer is subject to the purchaser obtaining, within 10 (ten) business days of acceptance, a building inspection report by a qualified and registered home inspector.

Should the report reveal structural defects exceeding R___ in estimated repair costs, the purchaser shall, within two (2) business days, either (a) notify the seller in writing of the intention to cancel this agreement, or (b) request in writing that the seller remedy such defects before transfer.

If no such written notice is given within the stipulated period, this suspensive condition shall be deemed fulfilled.”

This version achieves three things:

1. It provides clear deadlines.
2. It defines objective standards for defects.
3. It prevents either party from acting unreasonably or exploiting the clause.

Alternative Clause Example - Defining Defects

Another reason “subject to inspection” clauses fail is not because inspections aren’t done - but because they don’t define what kind of defect actually counts. You may need a clause with objective definitions – that differentiates structural vs latent vs compliance issues.

1. Quantified materiality – uses a monetary threshold, so minor damp or cracks don’t derail the sale.
2. Clear timeframes – avoids open-ended conditions.
3. Defined process – ensures both parties know how to proceed if defects are found.

This creates a fair and enforceable framework, protecting both sides while avoiding the dreaded “easy out.”

Here’s a version that’s legally robust and practically enforceable. It builds in definitions, thresholds, and process, covering both structural and compliance-related defects:

Suspensive Condition: Building & Compliance Inspection

This offer is subject to the purchaser obtaining, within 10 (ten) business days of acceptance, a comprehensive building and compliance inspection report from a qualified and registered home inspector.

The report shall identify:

(a) Structural defects – being defects that materially affect the stability or safety of the property or its permanent fixtures;

(b) Non-structural latent defects – including but not limited to damp, roof leaks, water ingress, or defective waterproofing, which individually exceed R___ (e.g. R20 000) in estimated repair cost; and

(c) Regulatory non-compliance – including deviations from municipal building plan approvals, electrical or gas certificate requirements, or other legal obligations affecting transfer or occupation.

Should the report disclose any such defects or non-compliances, the purchaser shall, within 2 (two) business days of receipt of the report, notify the seller in writing and elect either to:

(i) cancel this agreement; or

(ii) request the seller to remedy the defects or reduce the purchase price accordingly.

Failure to provide such written notice within the period specified shall be deemed to constitute fulfilment of the suspensive condition and unconditional acceptance of the property “as is”.

Striking the Balance Between Buyer Protection and Seller Certainty

A building inspection clause is not inherently bad - it’s often in the buyer’s best interest to identify defects before committing to a major investment. However, the clause must be precisely worded to ensure fairness. Buyers need to be protected from undisclosed structural issues, but sellers deserve commercial certainty once their property is effectively off the market. A vague “subject to inspection” clause gives neither party security.

In Summary

If you are drafting or reviewing an Offer to Purchase:

• Avoid template language that merely says “subject to satisfactory inspection.”
• Insist on specificity: timeframes, qualifications, cost thresholds, and next steps.
• Note that damp may not automatically trigger cancellation unless you’ve set a cost threshold - which is why the R-value benchmark is so useful.
• Get legal guidance before signing - a single poorly phrased sentence can derail the entire sale.

At VDM Attorneys, we regularly assist estate agents, buyers, and sellers in drafting legally sound and enforceable OTPs that protect all parties and minimise disputes at registration stage.

📞 Need Help Drafting or Reviewing an Offer to Purchase?

Contact our Property Law Department today for expert assistance in ensuring your contracts are watertight - and that no clause gives anyone an easy out.

👉 vdm.law | [email protected]