Have you ever heard the term buyer’s remorse? Or have you ever signed a contract and wished that you had a way to get out of it?
If so, the cooling off period may be your get out of jail card. In this article, we’ll discuss all things cooling off period.
What is the cooling off period?
The standard REIQ contract has a cooling-off period; unless:
- the contract was formed as a result of a sale at an auction; or
- the buyer has waived its right to the colling off period.
During the cooling off period, a buyer can terminate a contract for any reason.
How long is the cooling off period?
The standard cooling off period is 5 business days. A business day does not include a Saturday, Sunday or public holiday.
The cooling off period begins on the day the buyer receives a copy of the signed contract. If the day the buyer receives the signed contract is not a business day, then the cooling off period starts on the next business day. If the buyer has signed the contract after the seller signed it, the buyer is taken to have received it when the buyer has both signed the contract and advised the seller that it has accepted the seller’s offer to sell.
The cooling off period ends at 5pm on the fifth business day.
Terminating under the cooling off period
During the cooling off period, the buyer may terminate the contract without cause or reason. A buyer may terminate the contract by giving a signed notice of termination to the seller.
Are there any penalties for terminating under the cooking off period?
Yes. The penalty amount if 0.25% of the purchase price.
Within 14 days after the buyer terminated the contract, the seller must refund the deposit paid by the buyer but may deduct from the deposit a termination penalty of 0.25% of the purchase price.
Terminating under the cooling off period may just be your get out of jail card, but it does come at a cost. If you are thinking of terminating under the cooling off period, contact your conveyancer. It is best to seek advice before taking any action.
If you have any questions about this article or wish to discuss its contents, please call 1300 080 569 or email [email protected]
Irfan Ebrahim
27/01/2022
DISCLAIMER: This article is provided for general information purposes only. Its content is current at the date of preparation. Changes in circumstances or policy or legislation after the time of preparation may impact the accuracy of the information provided. It is not legal advice and is not tailored to meet your individual needs. You should obtain specialist advice from a qualified professional based on your specific circumstances before taking any action concerning the matters discussed in this guide. One80 Conveyancing Pty Ltd will not accept liability for any reliance on this article, including but not limited to, the accuracy, currency or completeness of any information or links.
