What is the condition precedent ?

Let’s find out together 
7.09.2022 2 minuti di lettura

When we talk about buying a property we come across technical terms to the most unknown, such as "condition precedent". Let's find out what it is, what it does, and what the benefits are. 

The suspensive condition: if and only if.
According to Article 1353 of the Italian Civil Law Code, the condition precedent is defined as follows: "The parties may make the effectiveness or the termination of the contract or of a single agreement subject to a future and uncertain event". 

This means that in the real estate proposal or in the preliminary contract, the condition for which it will proceed to conclude the purchase must be clarified. Specifically, the uncertain event must occur and in order not to go too far, when writing the precedent condition it is good to specify some factors: 

  1. clarify what is the future and uncertain event, generally the most common reasons are:
    1. if the loan is granted;
    2. if the buyer can sell his/her property.
  2. determine within a time limit within which the event should occur;
  3. explain what happens if the time limit has been exceeded or the event has occurred or not.

Pro and cons
In most cases the condition precedent is advanced by the buyer, and is in their sole protection. Indeed, it is generally not very welcome by sellers, because it does not allow them to sell the house quickly and  it also leaves them in a limbo of uncertainty. 

The seller to "protect himself" from this disadvantage, sets a deadline by which to have a response. 

Fulfillment or not of the event 
Once the precedent condition has been defined and therefore the event must occur, it is necessary to make the appropriate requests, by the buyer, in order for the event to take place. In the case of a request for a mortgage, the possible answers can be two:

  • request accepts: a resolution document must be issued that approves the mortgage and with which you can write the irrevocable purchase proposal;
  • request denied:in this case, it is important to have a letter of refusal which explains why the application was rejected. 

For any type of application made for the condition to be verified, it is important to have a document showing that the event did not occur for certain reasons and not because of the buyer. This is because the buyer is personally liable for the failure to fulfill the condition if it does not occur due to him. 

Expiry of time limit
If no response has been received within the agreed time, both acceptance and refusal, the buyer must inform the seller, through the estate agent, about the situation. It will be on discretion of the two parties involved to decide whether:

  • extend the period of the precedent condition;
  • terminate the contract, leaving both parties free to continue the work on selling the property and the search for the house.

Condition precedent or condition subsequence, the differences
As we have explained above, the precedent condition, in a real estate negotiation, causes the purchase process to suspend all legal effects, for a certain period of time until the occurrence of the condition, put in place by the buyer. Only when the future and uncertain event is realized, it will be possible to reopen the negotiation. 

The condition subsequence, however, is the opposite. Indeed, with it, in a contract, it is specified what will be the event that occurs will put up to legal effects. The contract is effective but some of its effects can be eliminated upon the occurrence of a given situation, for example it applies when permission is sought from the municipality. When these permits are granted, the condition has been fulfilled and the legal effects granted will be lost. 

As we understand, real estate contracts are not so simple to write or understand, so it is better to rely on competent real estate agents,  who support you in the process of buying the house. 
If you need information about the services offered by Kaaja to buy a property, please visit or contact us. 

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