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Cash Out Clause Question
Is there any legal or statutory (or other) requirement that
a cash out clause be of a particular period of time?
As I understand it, a cash out clause means that a con-
ditional buyer must be given a period time to withdraw all
conditions and agree to purchase / go unconditional, as
the vendor has received either an unconditional offer at
the same price, or an offer at a higher price.
I don't believe that there is - by agreement in the agreement. Often doesn't have to be at same or higher - can be worded to be a better offer in the eyes of the vendor (could be for less but cash).
You can contract whatever you like Perry including the timeframe, your general understanding is correct although as Wayne says it doesn't even need to be a higher offer if the other party agrees to that. I would however avoid putting in a condition that had no timeframe at all as I am not sure what the effect of that would be.
Found this in my dim dark files.
If before the vendor has been notified that the condition(s) herein have been satisfied the vendor obtains an offer for the within property on terms acceptable to the vendor then the vendor may give the purchaser three working days' notice in writing advising the purchaser of such offer and may, at any time after the expiry of such notice and before receiving advice of the fulfillment of the said condition(s) or of the waiver thereof by the purchaser, by further notice in writing to the purchaser cancel this contract.
Note that it says three days. You can pretty much change that to whatever you want.
Run it past your Solicitor. He/she may even have a better clause you can use.
Patience is a virtue.
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