Frequently Asked Questions About Your Right To Cool Off
- Breaking/cancelling the contract after the cooling off period
Can you break the contract after the cooling off period has expired? Yes, under some circumstances you can end the contract. If there are conditions in the contract which allow you to end the contract should an event occur or not occur (conditions precedent/conditions subsequent) you can rightfully act on these; an example of such condition is the subject to finance clause. The subject to finance clause gives you the right to end the contract should your finance not be approved within a specific time frame.
Vendor’s breaches or home no longer fit for occupation (destroyed home) Other situations which allow you to end (rescind) the contract include: breaches by the vendor/vendor’s representative of the Sale of Land Act or any other relevant legislation; OR where the house is destroyed or damaged prior to settlement and no longer fit for occupation as a house-dwelling.
Where the vendor fails to accept your written offer within time When buyers make their written offer and there is an expiry date on which the vendor can accept that offer, effectively there is no contract in place, and you can avoid the contract without relying on the cooling off provisions.
There may be other methods available to you to validly end the contract. Please contact our us for further information.
- Changing your offer after signing the contract
You can change your written offer after signing the contract provided that the vendor has not agreed to your offer. Arguably, the vendor need not have signed the contract in order for the contract to be binding.
- When does the cooling off period start in Victoria
The cooling off period starts the next business day after you sign the contract. Note however there are exceptions to the cooling off right
- When does the cooling off period end?
The cooling off period ends three (3) business days after you sign the contract. If you signed on Monday, then the period expires on close of business Thursday.
- What is the refund after ending a contract under the a cooling off laws?
Provided that you end the contract correctly under the cooling off laws, you will be entitled to your deposit less $100.00 or 0.2% of the purchase price whichever is greater. If the cooling off period has expired and you wish to end the contract, significant cost will be incurred. The deposit paid will be forfeited and the Vendor can sue you for further moneys. Please contact us should you require tailored advice.
- What rights do I have after expiry of the cooling off period and I wish to end the contract due to an issue with the contract
By law, when you make a written offer and prior to the vendor accepting that offer, the agent must provide you with a copy of the contract you had signed. Intuitively this is so you can have the contract and section 32 vendors’ statement reviewed by your lawyer. If you were not provided with a copy of the contract you had signed when you made the written offer then there may be rights available to you.
- How do I exercise the right to cool off? Can I email my notice?
Section 31 of the Sale of Land Act provides that the notice ending the contract under the cooling off laws must be delivered to the vendor and/or its agent at the address for service (shown on the contract) and this notice must be signed.
- Do sellers (vendors) of property have the cooling off period rights?
No, the rights granted under the Act do not protect the vendor. This does not preclude a vendor from having special conditions drafted in the contract granting them such right.
- I am buying a business. Is there a right for me to cool off?
Yes and no. Your right to cool off is completely dependent on whether the signed contract contains specific conditions granting you such right. There is no law that protects a business purchaser.
- Does the cooling off period include weekends?
No. Weekends and public holidays are excluded.
- Are there any cooling off rights for auctions?
No. If the property is purchased at auction or within three business days before or after an auction there are no cooling off rights.
- Exceptions to the cooling off right
Not all purchasers are granted the right to cool-off. The exceptions are contained at section 31 of the Sale of Land Act 1962 which include:
- Purchases before, after or at auction (cooling off at auctions)
- You have entered into a contract with the vendor on substantially the same terms
- Property is used primarily for industrial or commercial purposes
- Property is more than 20 hectares and is used for farming purposes
- You are a real estate agent