In a standard residential property settlement, what typically happens if the purchaser's finance is not approved by the finance approval date specified in the contract?
Correct Answer
A) The purchaser can end the contract and recover the deposit
Most residential contracts include a finance condition that allows the purchaser to terminate the contract if finance is not approved by the specified date. This protects buyers from being legally bound to purchase when they cannot secure funding, and they typically recover their deposit in full.
Why This Is the Correct Answer
A finance condition makes the contract subject to loan approval by a set date. If finance is not approved and the purchaser gives the notice the clause requires, the purchaser can end the contract and recover the deposit.
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