Glossary

Conditions Precedent (Closing Conditions)

Also known as: closing conditions

The specific events or deliverables that must occur before a party is obligated to close — such as delivery of estoppels, title policy issuance, or contingency satisfaction — distinguished from ordinary contingencies by their direct, mechanical link to the closing obligation itself.

While often used interchangeably with contingency in casual broker conversation, conditions precedent are more precisely the closing-mechanics checklist — deliverables like recordable deed execution, payoff letters for existing debt, and tenant estoppel certificates — whereas contingencies such as financing and due diligence are broader rights that can terminate the deal earlier in the timeline. A PSA typically lists conditions precedent to each party's closing obligation separately, and failure of a condition precedent that is not waived by its beneficiary generally excuses that party's obligation to close without itself being a default, unlike a failure to perform a covenant. Tracking conditions precedent to completion is a core part of a broker's and transaction coordinator's job in the final weeks before a scheduled closing.