Purchasers of residential property in New South Wales have a right to rescind the contract for any reason within a limited time, known as a Cooling off Period.
The Cooling off Period starts on the first business day after the contract date.
The cooling off period ends at 5pm on the fifth business day after the contract date.
For off the plan contracts, the cooling off period expires on the tenth business day after the contract date.
The cooling off period is a critical consumer protection mechanism that allows Purchasers to withdraw from a contract within a specified time frame without incurring significant penalties. This period, standardly five business days, serves as a safeguard against impulsive or pressured decisions.
It allows Purchasers to review the terms of the contract thoroughly, seek legal advice if necessary, and ensure that the decision aligns with their best interests. The conditions attached to the cooling off period, such as the precise timing of its commencement, are designed to ensure clarity and fairness for both parties involved in the transaction.
Understanding and utilising the cooling off period effectively can prevent future disputes and financial losses, emphasising the importance of being well-informed about one’s rights in contractual agreements.
If the Purchaser rescinds during the Cooling off Period, the Purchaser forfeits 0.25% of the purchase price to the Vendor. The Vendor must refund the balance of the deposit (if any) to the Purchaser after rescission.
The Purchaser can shorten or extend the cooling off period by requesting for agreement from the Vendor. It is advisable that this agreement is in writing, either as a condition in the contract or by correspondence between the parties’ legal representatives.
The Purchaser can waive the cooling off period by providing to the Vendor (or the Vendor’s real estate agent / legal representative) a waiver, known as ‘Section 66W’ certificate. The Purchaser cannot alone sign this certificate, as it must be signed by their licensed conveyancer, solicitor or barrister who has explained to the Purchaser the effect of the contract, of giving the certificate to the Vendor (or its representatives) and of waiving the cooling off period.
The cooling off period applies to the sale of residential property unless:
It is critical that you communicate your decision to the Vendor prior to 5pm on the last day of the cooling off period. It is not enough to tell your conveyancer by that time, you need to give your conveyancer enough time to communicate that you are cooling off. Don’t leave it until the last minute.
No, there is no ability to cool off on transactions of property bought at Auction.
The standard time limit to exercise any cooling off rights is five business days, however, this time period can be shortened or extended by agreement by the Purchaser and Vendor.
If you rescind the Contract during the cooling off period, you forfeit 0.25% of the purchase price to the Vendor. Any balance of the deposit must then be returned to you.
Disclaimer: Every property transaction is different, and the information provided may not be relevant to your circumstances. By using this site you agree that the information provided is for general purposes only and does not constitute legal, financial, or professional advice.
