When talking about purchasing or selling properties in Australia’s real estate industry, discussion of cooling-off period (sometimes also referred to as cooling-off rights) would commonly pop up in the conversation.
The conveyancing solicitor usually handles or gives out advice when it comes to this aspect. However, since property purchase involves exchanging a huge amount of money, it would be advisable to know basic and “must-know” information of your rights and obligation as a residential realty buyer in Australia.
Let us start by answering the question “What is cooling-off period?”
A cooling-off period is a period after purchase wherein a consumer has the right to cancel a purchase and return obtained goods (for any reason) to acquire a full refund.
This core concept also applies to property purchase but other conditions must also be followed.
In Australia’s real estate industry, cooling-off period is an agreed amount of business days (usually 5) wherein the buyer has the right to cancel the contract and walk away from the legal agreement for whatever reasons he / she may have (change of mind is actually considered as a valid reason)
When the cooling-period is finished, the buyer cannot back-out from the purchase and the stipulations stated on the sale contract be followed.
However, if the buyer do opted to back out within the cooling-period, the seller cannot do anything about it – though the seller may charge a small termination fee which is dependent on state / location.
It is also important to note that all property buyers are entitled to a cooling-off period – except for the following situations:
>>The states of Tasmania and Western Australia does not have cooling-off periods
>>When the purchase is made through an auction
>>Cooling off periods are only applicable for residential houses / areas (FYI please that lands whose floor area is more than 2.5 hectares are not considered residential)
>>Waiving the cooling-off period
Expanding on the last bullet, the purchaser has the option to waived the cooling-off period. By accomplishing 66W certificate (also known as Office of Fair Trading waiver), the buyer completely forfeits all cooling-off rights. Additionally, this process must be done a business day before contract signing.
That’s just about it. Please remember that laws may vary from state to state. Please consult a local conveyancing solicitor for further clarifications about the provisions of the cooling-off period and sales property contract.