Having just celebrated Easter (hope you all had some quality time off), we’re in amongst a bunch of
public holidays.
So, it’s probably a
good time for a quick ‘refresher’ on how ‘Cooling-Off’ works!
You may (or may
not) be aware that there is typically a ‘Cooling-Off Period’ in Queensland
under most contracts for residential properties (when buying).
The cooling-off
period is not just 5 ordinary/calendar days, but 5 ‘business days’.
A ‘business day’ is
a day which is not a Saturday, a Sunday or a Public Holiday (in the place where
any relevant act is to be or may be done).
The way we work out
the cooling-off ‘period’ is a bit tricky! It usually starts on the business day
a copy of the contract is received by the buyer (at any time). It then ends at
5pm on the fifth business day.
It’s best to talk
to your solicitor before attempting to terminate under the cooling-off
provisions. Usually your solicitor will send the relevant notice of termination
for you (if that’s what you want, after weighing up the pros and cons).
Easter
example:
The buyer receives
the fully signed Contract on Thursday, 18 April 2019 (this counts as business
day 1 of 5, not day 0). The cooling-off period ends at 5pm on Monday, 29 April
2019 (business day 5). In addition to the Saturdays and Sundays not counting
towards the 5 business days, Good Friday, Easter Monday and Anzac Day also do
not count!
‘Cooling-Off’ isn’t
as great as it may initially sound. Beware of the termination penalty of 0.25%
of the Purchase Price! Any easy way to think of this is $250 per $100,000 of
the Purchase Price of the property. For example, for a $500,000 property, the
termination penalty would be 5 x $250 or $1,250. This can only be deducted from
a Deposit held, so if there is no Deposit held, no termination penalty to be
collected by the seller.
The cooling-off
period can be waived (given up entirely) or shortened by the buyer, by written
notice to the seller.
As with most areas
of law, there are exceptions. Below are some examples:
- A cooling-off period does not apply to a contract formed on a sale by auction (or entered into with a registered bidder no later than 5pm on the second clear business day after a property is passed in).
- Some other examples where a cooling-off period does not apply:
- A contract formed because of the exercise of an earlier granted option;
- Where the buyer is a publicly listed corporation (or subsidiary of);
- Where the buyer is the State or a statutory body;
- Where the buyer is buying at least 3 lots at the same time.