Buying and selling of properties involves a number of processes and procedures. There is a lot of documentation required at each step of the way in order to make it a legally binding contract. Conveyancing in Brisbane can be tricky as both the buyer and the seller are looking for their own best interests. Property managers and conveyancing solicitors provide all kinds of assistance and guidance to both parties regarding rules that govern buying and selling contracts for real estate. It is important to be informed of all legal issues before going ahead with the deal.
When going through the property contract, there is a cooling off period that can be effectively used by the buyer and the seller. During this period the buyer has the right to cancel the property deal due to any valid reason. The rules regarding cooling off periods may vary for different regions or territories. These rules are applicable for a private sale and not when a property is being auctioned off. Also, cooling off period is for residential property and does not apply to a commercial real estate. In case the buyer consulted a lawyer and obtained a Lawyers Certificate before the contract was signed, the cooling off period may not apply.
The Duration of the Cooling Off Period in Queensland
The duration of cooling off period in QLD is five business days commencing from the date when the buyer enters into a binding contract. The buyer becomes bound only after receiving the contract papers signed by both parties. All of these five days have to be business days so any holidays coming in between may not count.
The Benefits of the Cooling Off Period
The benefit of a cooling off period is that it gives the buyer the right to terminate the contract any time during these days. Pre-sales inspections can be carried out for the property to identify any presence of pests and termites. This information may not have been previously disclosed by the seller. Also, faults in the structure can be inspected by the building inspectors to ensure everything is the way it was supposed to be. In case the contract is terminated due to any of the reasons mentioned above, the seller is legally bound to refund the deposit. However, a termination penalty of 0.25% of the contract price may be deducted.
What is the Cooling Off Period For
The cooling off period in QLD protects the buyers from buying a property after realisation that it is not worth the asking price. There can be many reasons why the buyer might want to terminate the contract. Whatever the reason may be, the decision of not to go ahead with the deal can easily be implemented during the cooling off period.
All complex and complicating conveyancing processes in Queensland are best handled by conveyancing solicitors that can be consulted prior to getting into a property deal.
When does a cooling-off period begin and end?
In Queensland, a cooling-off period begins on the date that the buyer enters into a binding contract and receives all the relevant paperwork, which must be signed by both parties. Should a contract arrive on a weekend or holiday, the cooling-off period starts on the next business day. The cooling-off period comes to an end at 5 pm on the fifth day of the cooling-off period.
Can a cooling-off period be waived?
A buyer can opt to waive or shorten or the cooling-off period as long as they put it in writing.
See also: Importance of cooling-off period
3 Cooling-off period red flags to note<
Cooling-off periods come with specific terms and conditions of which both buyers and sellers of property should be aware:
- Certain contracts are exempt from the cooling-off period
Cooling-off periods aren’t applicable in auction sales. In addition, they won’t apply to a private treaty contract that’s entered into within two business days of a property being unsuccessfully auctioned or when the buyer was a registered bidder at the auction. If you’re a buyer, you’re also not entitled to a cooling-off period if you’re a publicly listed corporation, a government department or other statutory entity or if you’re purchasing at least three properties at the same time.
- There’s no cooling-off period< for sellers
If you’re the seller, you don’t benefit from cooling-off clauses under the law. So, be thoughtful before you put your property on the market, set your expectations for an asking price and agree to other contract terms and conditions.
- Cancelling a contract – even during the cooling-off period – comes at a cost for buyers
Unfortunately, as a buyer, you’ll be subject to a penalty if you cancel a sale during the cooling-off period – 0.25 percent of the contract price. The seller will then need to refund you the balance of your deposit within 14 days.
That said, you may be able to back out of a contract with no penalty if the home has serious structural defects, even if the seller is unaware of those issues.
Don’t let cooling-off periods make you lose your cool
Regardless of whether you’re a buyer or seller, if you find yourself having to navigate a cooling-off period scenario, try not to let it upset you. The most sensible course of action is to speak to your realtor.
They have a direct line of communication to qualified and experienced conveyancers who are familiar with Queensland’s property laws and can offer sound and practical advice, liaise with other parties on your behalf and help prepare all the necessary legal paperwork.