Peter Gordon Dip.FP. & Dip.FMB.
e peter@investoproperty.com.au
Ph: 0401 214 134

Cooling off period explained and how differ

Saturday, 18th January 2014

There are always many things to consider before exchanging on a property. Having your finance approved, making sure your solicitor/conveyancer has reviewed the contract, completed all searches on the property and you have had a building and or pest inspection completed if required.

All states have a different cooling off period, but make sure you tick all the boxes first. If you do decide to exchange on a contract of sale before completing your due diligence just remember the following – ‘think with your head and not your heart’. We never recommend clients exchange before completing their due diligence.

Once you have exchanged you may have some time to think about your purchase or ‘cool off’. During this time a purchaser can rescind the contract before the cooling off period ends. It is important to remember that cooling off periods do not apply if you are purchasing at auction.

Each state and territory has a different structure for cooling off periods so if you are investing in interstate property it is good to know the difference. Here we have outlined how each state and territory treats the cooling off period.

NSW

In NSW the cooling off period is five business days from exchange. This can be waived by the purchaser. The cooling off period does not apply automatically and requires the consent of both vendor and purchaser for it to be applicable. Remember if you do rescind you will forfeit 0.25% of the purchase price.

Queensland

In Queensland the cooling off period is five business days from exchange, unless waived by the purchaser. The cooling off period will only commence if the vendor complies with PAMDA. If the purchaser does rescind they will loose 0.25% of the purchase price.

ACT

In the ACT the cooling off period is five business days from exchange, unless waived by the purchaser. The cooling off period does not apply automatically and requires the consent of both vendor and purchaser for it to be applicable. If the purchaser does rescind they will loose 0.25% of the purchase price.

Victoria

In Victoria the cooling off period is three business days from exchange. If the purchaser rescinds they loose the greater of $100 or 0.2% of the purchase price. Any provision in the contract that attempts to waive the cooling off period is void and has no effect.

South Australia

In South Australia the cooling off period is two business days unless waived by the purchaser. If the purchaser does rescind they get all of the deposit back minus money paid by the purchaser in consideration of an option to purchase the land if the deposit is less than $100.

Northern Territory

In the Northern Territory the cooling off period is four business days from exchange and applies only if the purchaser does not have a solicitor or conveyancer involved in the negotiation of the contract.

Tasmania and Western Australia

In Tasmania and Western Australia there is no cooling off period.

If you would like to know more about cooling off periods and how they differ from state to state and territories please contact  peter@investoproperty.com.au