Buying or selling a property may be one of the biggest financial decisions of your life. It is therefore important to understand your rights before attending an auction or placing an offer on a property.

 

So, what is a cooling-off period?

A cooling-off period is a set number of days (in the ACT it is 5 business days) where a buyer may cancel a contract for the purchase of a property. If the buyer decides to cancel their contract, a termination fee of 0.25% of the Purchase Price will be payable by the buyer to the seller.

A cooling-off period is not available under every circumstance and as such, there will be no cooling-off period on contracts where:

  1. the buyer is a corporation; or
  2. the property is sold by tender; or
  3. the property is sold by auction; or
  4. the buyer waives the cooling-off period.

 

How do you waive a cooling-off period?

A buyer may, under section 13 of the Civil Law (Sale of Residential Property) Act 2003 (ACT), waive the cooling-off period where a section 17 certificate is provided by a lawyer.

 

What is a section 17 certificate?

A section 17 certificate is obtained by a buyer and signed by a lawyer (who is not acting for the seller) containing a statement to the effect that the lawyer explained to the buyer the nature of waiving the cooling-off period i.e. that the contract becomes unconditional from exchange.

Where a person is selling a property, the contract for the sale of that property does not become unconditional until such time as:

  1. the cooling-off period expires (5 business days from the date of the contract); or
  2. the contract exchanges with a completed section 17; or
  3. the property is sold at auction (or tender).

At WMG Legal we will guide you through the stressful process of buying and/or selling a property while ensuring you understand your rights. Contact us on 6253 9766 for a free no obligation discussion with one of our solicitors.