Cooling-off period |
For real estate agents, property developers and pastoral house agents
Any contracts for residential property not sold by auction have a cooling-off period of five business days.
The 5 day cooling-off period starts the day the buyer receives a copy of the residential property contract signed by both the buyer and seller, if that day is a business day. If that day is not a business day, the cooling-off period commences on the next business day. The cooling-off period ends at 5pm on the final day of the cooling-off period. When the cooling-off period ends, the buyer is bound to buy the property, subject to the terms of the contract.
In any dispute concerning the commencement of the cooling-off period, the seller must prove that the buyer received a copy of the contract.
Waiving or shortening the cooling-off period
If a buyer wishes to waive or shorten the cooling-off period, they must give the seller or seller´s agent PAMD Form 32a - Lawyer's certification (PDF, 200 KB), which the lawyer must sign and date, before they sign the contract.
The certificate must state that the lawyer:
- is independent of the seller or seller´s agent
- will not receive any benefit from the sale
- has told the buyer about the effect of the contract, and the purpose and nature of the certificate.
The lawyer's certificate does not apply to residential property sold at auction. When shortening the cooling-off period, lawyer's certificate shortens the cooling-off period until 5 pm on the day stated in the certificate.
Terminating during the cooling-off period
Any time before the end of the five-day cooling-off period, the buyer can terminate the contract.
To do so, they must give the seller or seller´s agent a written signed and dated notice indicating that they wish to terminate the contract. They can deliver it personally, or email or fax it.
The seller must refund the buyer´s deposit within 14 days of terminating the contract, but may deduct a termination penalty equal to 0.25 per cent of the purchase price.
Deposits during the cooling-off period
The buyer must pay the deposit to the deposit holder at the times shown in the reference schedule of the contract. The deposit holder will hold the deposit until a party is entitled to it.
Last reviewed 21/11/2011 |
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