When purchasing property in Victoria a purchaser has 3 business days to ‘cool off’ on a purchase.

Section 31 (2) of the Sale of Land Act 1962 states:

  ‘Where a purchaser under a contract for the sale of land signs that contract he may at any time before the expiration of three clear business days after he has signed the contract give notice to the vendor that he wishes to terminate the contract and where he has signed that notice and given it in accordance with the provisions of this section the contract shall be terminated’.

This means if you sign a contract to buy land or property you can change your mind and withdraw from your offer within 3 business days.  This applies to the private sale of residential and small rural property sales.

Time period

The cooling off period applies 3 business days from when the purchaser signs the Contract of Sale.  Keep in mind the clear business days do not include weekends and public holidays.  The day you sign the contract is not included in the 3 business days to cool off. 

For example; if you signed your contract on a Saturday you would have up until 5pm Wednesday to cool off. 

This means if you choose to cool off you must provide notice in writing to the Real Estate Agent or the Vendor at the address listed in the contract by 5pm. 

There is no cooling off period if:

• The sale is a publicly advertised auction.
• The land is sold within 3 clear business days before or after a publicly advertised auction
• The parties have previously entered a contract for the sale of the same property.
• The purchaser is an estate agent, or a company
• The land is used for industrial or commercial purposes,
• The land is more than 20 hectares and is used primarily for farming

How do you cancel your offer?

If you decide you no longer want to go ahead with the purchase, you may provide written notice to the Vendor or the Real Estate Agent.

Ensure you sign the written notice and have it delivered to the Vendor or the Vendors Agent at the address listed on the contract bitcoin blender.  It would be best to serve the notice to the Vendor, the Vendors Agent and the Vendors legal representative to ensure valid serving of notice.

Penalty

Should you cancel your offer you will be entitled to a full refund of any money paid less $100 or .2% of the purchase price, whichever is greater.  This money is paid to the Vendor.

For example; if you purchased a property for $900,000 you would be liable to pay 2% of the purchase price, which would amount to $1,800. 

Why you should not rely on the Cooling Off period

Although the cooling off condition would allow you to sign a Contract of Sale knowing you could end the contract, it should not be the reason to enter into an agreement to buy land. 

Reasons you should not rely on the cooling off period are:

• You lose time and money should you cool off.
• The cooling off period may not be enough time for your conveyancer or lawyer to thoroughly review the Contract of Sale and Vendors Statement and order any relevant certificates if they are not included in the S32.  Note, some certificates take as long as 14 days to arrive.
• Although a small risk, the 3 days you commit to this property may prevent you from making an offer on another property should one come along in that short period.

Purchasing property or land should involve doing your own research and having a Conveyancer review your contract before you make any formal offers Spotify Promotion.  You should only proceed with signing a Contract of Sale once you have performed due diligence and accepted the risks and benefits merged with the land.

Can the Vendor cool off

No the vendor cannot cool off under the Act.  A Vendor may have Special Conditions drafted into the contract allowing them to end the contract.

Reasons why people choose to enter contracts with cooling off periods?

The Real Estate Agent has “other purchasers interested”

Entering a contract under pressure from the agent or being advised there are other purchasers interested in the property is a common sales tactic.  A sense of urgency will always put purchasers under pressure to commit to the property.  This is fine if you have done your due diligence and checked the section 32.  It is not the best approach to sign the Contract of Sale and rely on the 3 day cooling off period in order to have the contract reviewed by a conveyancer later.

“I want my family to see it first before I go ahead”

Having family or friends view the property is very common and many people may enter into a contract with a cooling off period subject to their parents or a builder looking at the property first.  The issue that may arise is that the Vendor may not be available during those 3 business days or may not grant you access to the property during that time.  This is a consideration the purchaser must be aware of when committing to the contract, and should they not cool off in those 3 business days, they are locked into the contract.

Using the cooling off period comes with its own risks and benefits. Purchasers should consider the pros and cons of entering into a Contract of Sale when relying on the cooling off period.