There are many important notices, warnings and conditions associated with Contracts for the Sale of Real Estate in Victoria designed to alert purchasers to the consequences of the decision they are making. However, even after you have signed a contract, you may find you have “buyer’s remorse” and wish to get out of the contract. In that case, you should know about your cooling off rights.
In Victoria, for certain Contracts of Sale of Real Estate, a purchaser has three business days after the purchaser signs the contract during which a purchaser can ‘cool off’ on their decision to buy with only a modest penalty (0.2% of the purchase price).
It is important to note that the cooling off right starts on the next available business day after the day that the purchaser executes the contract, and the time does not run from when the vendor sends the signed contract back. Accordingly, if you wait until the Contract is counter signed by the vendor and exchanged, you may not have much time and so you should act quickly.
If a purchaser signs a contract on Wednesday, then the purchaser’s cooling off right starts on Thursday and the purchaser has until 5pm Monday to cool off. If one of these days is a public holiday, then the cooling off period will be extended by another business day. We thus always recommend that clients contact us as early as possible so that relevant arrangement can be made to properly cool off the contract.
The above right is in addition to any rights available for defective contract form or disclosures.
Note also that, if you decide you do not wish to proceed and you or your representatives have not yet received the signed contract returned from the vendor, you can withdraw your offer (assuming the terms of your offer permit you to do so) and avoid paying the termination penalty.
The cooling off notice must be addressed to the vendor or its representative or agent so make sure you send it to the correct parties and address or it may not be effective.
There are of course some exceptions where the cooling off protection doesn’t apply, including
(a) contracts for industrial or commercial land or farming land which is more than 20 hectares;
(b) contracts entered into for land that is sold by publicly advertised for auction or within three clear business days before or after the day on which a publicly advertised auction for the sale of that land is to be held;
(c) where the purchaser is a real estate agent;
(d) where the purchaser is a company; or
(e) where the vendor and purchaser have previously entered into a contract for the sale of the same land in substantially the same terms.
If you require further guidance on your proposed real estate purchase in Victoria, please contact us at (03) 9614 7111