Under the standard LIV/REIV contract, the loan condition is strictly applied and exists for the buyer's benefit only — the seller cannot terminate just because your loan isn't approved. To rely on it you must have applied for the loan immediately, with the lender and amount matching what's stated in the particulars of sale, and done everything reasonably required to obtain approval — the seller can ask for evidence of your efforts. If the loan isn't approved by the approval date, you can end the contract, but only by serving written notice on the seller within 2 clear business days after the approval date (or any later date the seller allows), together with the lender's written evidence of rejection or non-approval, and only if you're not otherwise in default. Your deposit is then refunded in full.
If you don't serve that notice within the 2-business-day window, the right to end the contract lapses and the contract continues as if the condition were satisfied — silence counts as a yes. If you then lack sufficient funds at settlement, the seller may terminate or seek specific performance, claiming compensation either way. You can also ask the seller for an extension of the approval date (they may decline), or waive the condition and proceed — taking on the settlement risk.
Finance condition at the deadline: what to do
| Finance status by the approval date | What to do | Outcome |
|---|---|---|
| Approved (satisfactory) | Give written notice that finance is approved | The condition is satisfied and the contract proceeds |
| Not approved or unsatisfactory | Serve written notice ending the contract, with the lender's written evidence of rejection or non-approval, within 2 clear business days after the approval date | The contract ends and your deposit is refunded in full |
| Still pending | Ask the seller in writing for a later approval date | Only works if the seller agrees; otherwise the 2-business-day window after the approval date is your last chance to end |
| No notice within 2 clear business days after the approval date | Nothing | The right to end lapses — the contract continues as unconditional and you must settle |
| You waive the condition | Give written notice of waiver | The contract becomes unconditional on finance — you take on the settlement risk |
General information only — not legal advice. Conveyancing law varies by state and changes over time; confirm your situation with a licensed conveyancer or solicitor.
