The cooling off period is a right, under Section 31 of the Sale of Land Act 1962, which allows a Purchaser to end the contract within three clear business days of the day of execution of the contract.
The Purchaser must give notice to the Vendor that they wish to terminate the contract. Once signed notice is given in accordance with Section 31 of the Act, the contract shall be terminated.
It is important to note that a right to “cool off” rests only with the Purchaser and not a Vendor.
When is there not a cooling-off period?
A cooling-off period does not apply to land that is used primarily for industrial or commercial purposes or land which is more than 20 hectares and is used primarily for farming.
The cooling-off period also does not apply to land sold at a publicly advertised auction or within three clear business days before or after the auction date.
In addition, if a Vendor and Purchaser have previously entered into a contract of sale for the same land described in the contract with substantially the same terms, then there is no cooling-off period available.
What happens if I ‘cool-off’?
After service of notice to terminate, the Purchaser is entitled to a refund of all the money they paid EXCEPT for $100 or 0.2% of the purchase price (whichever is more). This period is designed to safeguard Purchaser’s rights by giving them the opportunity to change their mind.
To speak to an experienced consultant regarding your purchase/sale, please contact us on 03 9450 9400.