This clause permits one party to temporarily halt performance of their obligations under a real estate contract while the contract is in the process of being terminated. Rather than requiring full performance right up until termination becomes final, this clause allows the party seeking termination to "pause" their obligations—such as continuing to make lease payments, maintain the property, or provide services—once they've initiated termination proceedings. This is particularly valuable in real estate because performance often involves ongoing financial obligations or property maintenance that could become wasteful if the contract is about to end. For instance, a tenant might suspend rent payments once they've given notice to terminate, or a landlord might suspend repairs once termination is underway.
The clause protects parties from incurring unnecessary costs during the wind-down period and prevents disputes about whether obligations continue during the termination process. However, it must be carefully drafted to specify exactly when suspension begins (upon notice, upon agreement, or upon a specific triggering event), what obligations are suspended versus what must continue, and what happens to suspended obligations if termination fails.
Negotiate clear trigger points for when suspension begins—ideally requiring mutual written agreement or a court order rather than unilateral action—to prevent one party from simply stopping performance and claiming termination is "pending." Specify which obligations suspend (rent, maintenance, utilities) and which continue (insurance, property taxes, security obligations), as suspending everything could expose the property to damage or liability. Include language requiring the suspending party to maintain the property in reasonable condition and to resume full performance if termination is withdrawn or denied, along with a timeline for catching up on suspended payments.
Frequently Asked Questions
What does this clause mean in simple terms?
This clause permits one party to temporarily halt performance of their obligations under a real estate contract while the contract is in the process of being terminated.
Why should I care about this clause?
Rather than requiring full performance right up until termination becomes final, this clause allows the party seeking termination to "pause" their obligations—such as continuing to make lease payments, maintain the property, or provide services—once they've initiated termination proceedings.
What are my options?
This is particularly valuable in real estate because performance often involves ongoing financial obligations or property maintenance that could become wasteful if the contract is about to end.
How does this affect small businesses?
For instance, a tenant might suspend rent payments once they've given notice to terminate, or a landlord might suspend repairs once termination is underway.