The ‘Cooling Off’ Period – What You Need to Know
So you’ve found the perfect property through a listing with a company like RealestateVIEW.com.au, and have signed on the dotted line. You’re looking for a good lawyer such as Mahons.com.au in Melbourne or Caputolawyers.com.au in Sydney, and then you’re told your cooling off period will be void if you seek advice from a lawyer. So what is a “cooling off period” and what are the rights of the purchaser?
Cooling Off period: The exclusions
Generally speaking, a purchaser of real estate in Victoria has three days to “cool off” before the contract is binding. Section 31 of the Sale of Land Act dictates that a purchaser has three business days to terminate a real estate contract from the date signed. That’s the date the purchaser signed, not the vendor. There are certain restrictions associated with the cooling off period. For instance there is no cooling off period if the sale is three days or more before an advertised auction, the buyer has entered into a contract with the vendor on the property before, or the purchaser is an estate agent or corporate body.
Cooling Off period: Manipulation
The cooling off period is open to manipulation from estate agents, and shamefully often is. It’s useful for buyers to be aware of the common ways an agent may act only in the vendor’s interest, and their own.
Agents have no obligation to recommend seeking legal advice to a purchaser, and it’s not in their interest to. Should a purchaser seek legal advice their cooling off period is lost, however should the lawyer find any issues with the contract it is still possible to pull out of the sale.
Be aware of an agent who withholds the contract until the cooling off period has expired. Remember, the 3 day period begins when the purchaser has signed, not the vendor. Agents have been known to have a purchaser sign on the line on a Saturday and not hand the contract over to the vendor until the following Monday, they then only give it to the purchaser’s lawyer on the Wednesday, after the cooling off period has expired.
Agents may recommend a conveyancer rather than a lawyer with the explanation that the cooling off period will not be void. However, the agent may recommend a conveyancing firm who will then feel obligated to give a positive outcome. Although you are paying the conveyancer, they may not be acting in your best interests.
Cooling Off: Emergencies only
Think of the cooling off as an emergency get-out. There is no advantage of using it unless it is absolutely necessary; it’s certainly not a three day window to mull over if the kitchen units are the right colour. All research should have been completed before signing and only in extreme circumstances should it be relied upon.
Always have a property thoroughly checked before signing any contracts, inspections and searches cost money, but is a worthwhile investment if a problem is found. Real estate contracts are always in the vendors favour – so be mindful of any special conditions attached to the purchase of real estate.