Cooling-off from a Property Purchase
Whether you are a purchaser or a vendor finding out about cooling-off before or after a contract has been signed - our specialist property lawyers and conveyancing staff can advise you according to your situation.
The cooling-off period of three clear business days applies to private sales only and not to properties that were purchased at auction. The property must be a residential property or a small rural property (regardless of price).
It’s important to note that a purchaser who exercises this right to cool-off is entitled to a refund of the deposit less $100.00 or 0.2% of the purchase price, whichever is greater. On a substantial property this cost may be significant. Many purchasers are unaware of the cost involved until advised. If the purchaser cools-off, it is unlikely that the vendor is under an obligation to pay a commission to the agent.
When the cooling-off period does not apply
- the property is not residential;
- the land is used primarily for industrial or commercial purposes or is more than 20 hectares in size and used primarily for farming;
- the parties have previously entered into a similar contract for the same property;
- the purchaser is an estate agent or a corporate entity;
- the contract is signed at or within three days before or after a publicly advertised auction.
Time limits and commencement of the cooling-off period
- The period commences once the purchaser has signed the contract (not from the date the seller signs it).
- The day of signing is excluded and it is generally considered that the purchaser can cool-off right up until midnight on the last of the three business days.
- If the vendor makes a counter-offer the time recommences from when the purchaser re-signs (and therefore accepts the counter-offer).
- If the vendor has not signed the contract but the purchaser has signed, then the purchaser may still have lost the right to cool-off after the three day period has expired. However, the purchaser may simply withdraw the offer under the normal principles of contract law and will not need to rely on cooling-off rights.
The cooling-off notice and the contract of sale