Vendor & Purchaser Information
Contract & Cooling Off Rights
A purchaser of land can change their mind and choose to Cool Off.
Under a contact for the sale and purchase of land a purchaser who wishes to cool off can do so by giving written notice to the vendor (Real Estate Agent) stating the purchaser's intention not to be bound by the contract. No reason is required to be supplied.
Notice can be given via the following methods:
- to the vendor or the vendor's agent personally;
- to the agent with a person in the employ of the agent, at the agents registered office, nominated as the address for service;
- by certified mail to the vendor at the nominated address for service; or
- by fax to a number provided by the vendor or their agent.
If the purchaser does choose to Cool Off, the vendor must return any money paid as a deposit by the purchaser.
However, not everyone is entitled to Cooling Off rights.
Circumstances where Cooling Off rights are not applicable can include:
- where the purchaser is a body corporate;
- the purchaser has obtained independent legal advice and signed a Form 3 waiver; and
- the property has been purchased at auction.
The Cooling Off period in relation to the sale of land is two clear business days from the making of the contract or the service of the Form 1, whichever is the latter.
Two clear business days means a full 48 hours, therefore if a contract is made on one business day, the Cooling Off period will not begin until midnight of that day. It will then run for a period of 48 hours, if this period crosses over a weekend the purchaser will have the benefit of the weekend as extra days.
Once the Cooling Off period is complete the purchaser is required to pay their deposit.
The deposit can be larger than $100 for the purchase of land or 10% of the total purchase price.
Vendor & Purchaser Information
Purchasing Under Auction Conditions
Calling for bids at auction is considered to be "an invitation to treat" and a bid at auction constitutes an "offer".
When purchasing under auction the purchaser does not hold the right to the normal 48 hours Cooling Off period. Where the purchaser is represented at auction by a nominee and their bid is successful, or where the property has been passed in and the purchaser is successful in purchasing the property later that day, they are considered to be buying under the terms and conditions of auction.
If the sale is by auction, even though there is no right to Cool Off by the purchaser, a Form 1 must still be prepared and made available to the public for at least three consecutive business days prior to the auction taking place at the agents or auctioneers offices. The Form 1 is also required to be displayed at the place of the auction at least thirty minutes prior to the commencement of the auction.
Vendor & Purchaser Information
Insurance
When purchasing a property the purchaser is required to take out the appropriate building insurance at the time of signing the contract of sale.
The insurance is there to protect the purchaser’s and the mortgagee’s interest; the insurance should note the interest of the mortgagee on the policy.
Each lender will have their own requirements but the initial Cover Note of the policy should be for at least 6 months & should be for an amount equal to the amount of the loan, or value of the property whichever is the greater.