Cooling off period for residential property purchases in Victoria

Under certain circumstances a purchaser of residential property in Victoria has a cooling-off period of three clear business days from the date of signing the contract. This means that the purchaser can terminate the contract during this period without giving any reason.

If you are considering buying a residential property in Victoria, it is important to be aware of the cooling-off period. This will give you peace of mind knowing that you have the right to change your mind within three days of signing the contract.

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The cooling-off period does not apply in the following situations:

Sales by auction

Sales that take place on the day of the auction

Sales that take place within three clear business days before or after the day of the auction

Sales to a real estate agent or a corporate body (a company)

Sales where the parties have previously entered into a contract for the sale of the same property in similar circumstances

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Penalty for exercising the cooling-off period in Victoria

When a purchaser exercises their right to cool off in Victoria, they are liable to pay a penalty of either $100 or 0.2% of the purchase price, whichever is greater. This means that for purchases over $50,000, the penalty will be 0.2% of the purchase price. The purchaser is entitled to a refund of the deposit monies, less the penalty. This penalty is payable even if an initial deposit was not paid.

For example, if a purchaser exercises their right to cool off on a property that is worth $500,000, they would be liable to pay a penalty of $1,000 (0.2% of $500,000). They would then be entitled to a refund of their deposit monies, minus the penalty of $1,000.

If you are considering buying a residential property in Victoria, it is important to be aware of the cooling-off period and the associated penalties. This will help you to make an informed decision about whether to exercise your right to cool off.

Definition of three clear business days for the cooling-off period in Victoria

The cooling-off period for residential property purchases in Victoria starts on the day after the contract is signed and ends after three clear business days. A clear business day is a day that is not a weekend or a public holiday.

For example, if the contract is signed on a Saturday, the cooling-off period would start on Monday and end on Wednesday.

There is no certainty as to whether the cooling-off period ends at the end of the business day (5pm) on the last day or at the end of the day (midnight). The conservative view is that the right to cool off can be exercised up until midnight.

If you are considering buying a residential property in Victoria, it is important to be aware of the definition of three clear business days for the cooling-off period. This will help you to make sure that you exercise your right to cool off within the correct timeframe.

Commencement of the cooling-off period in Victoria

Sure, here is the redrafted text: Commencement of the cooling-off period in Victoria The cooling-off period for residential property purchases in Victoria commences on the day after the purchaser signs the contract. This is the case even if the vendor has not yet signed the contract and the contract is not binding. For example, if the purchaser signs the contract on a Friday, the cooling-off period would start on Monday and end on Wednesday.

If the vendor does not sign the contract within three days, the purchaser will have lost their right to cool off. However, the purchaser may still be able to withdraw their offer to purchase. This is because, in the absence of a signed contract, there is no legally binding agreement between the parties. In this situation, the purchaser is entitled to a full refund of their deposit without any penalty.

Exercising the right to cool off in Victoria

To exercise your right to cool off in Victoria, you must give written notice to the vendor or their agent. There is no specific form for the notice, and it can be a simple letter. You can deliver the notice by leaving it at the address for service of the vendor as specified in the contract.

The cooling-off period cannot be contracted out of. Any condition in the contract that seeks to take away this right is void. The contract must also include a notice setting out the cooling-off rights, and a purchaser may rescind a contract that fails to include this notice.

If you need help exercising your right to cool off, you can contact a property conveyancer. A conveyancer can help you understand your rights and obligations and ensure that you comply with the relevant legal requirements.

Here are some additional things to keep in mind when exercising your right to cool off:

The notice must be given within three clear business days of signing the contract.
The notice must be in writing.
The notice can be sent by mail, email, or hand delivery.
The notice must be addressed to the vendor or their agent.
The notice must include your name, the date of the contract, and your intention to terminate the contract.

If you have any questions about exercising your right to cool off, you should speak to a property conveyancer.