A ‘cooling off period’ is a short period of time in which the purchaser can back out of a contract. Cooling off rights and periods can be found in a number of contracts – from the purchase of a house or car, to domestic building contracts. However, cooling off periods differ from state to state, so it’s important that both the seller and buyer understand their rights. Read on to learn more about the cooling off periods in South Australia or speak to one of our trusted conveyancers.
- What are cooling off rights?
- Cooling off periods in South Australia
What are Cooling Off Rights?
A right to “cool-off” is a contractual or statutory right which gives a party, to an otherwise binding contract, the right to change their mind during a certain period of time. Provided that the cooling off notice is given strictly in accordance with the relevant procedure, the contract will come to an end. Generally speaking, if a party has validly cooled off, then neither party will have any further rights and any deposit paid will have to be refunded.
Whilst some contracts may be conditional upon the satisfaction of a pre-condition, it is unusual for a contract to contain a cooling off right by agreement. An example of an agreed cooling off right is where one party has a right to terminate the contract before a certain date, if they are not satisfied with the outcome of their due diligence enquiries.
3 Types of Cooling Off Periods South Australia
In South Australia, a person who is a purchaser of a second hand motor vehicle can send a cooling off notice (in writing) by serving it on the car dealer during the cooling off period. The cooling off period starts when the contract to purchase the car is signed, and ends at the end of the second clear business day after the day on which the contract is made.
2. Houses, Land and Businesses
A person buying property in SA may have certain cooling off rights under the Land and Business (Sale and Conveyancing) Act 1994. These rights do not apply across the board, but if a statement of particulars has to be given by the seller, in general there is a right to cool off.
When Does the Cooling Off Period End in Relation to the Sale of Land?
- Where the vendor’s statement is served on the purchaser before the making of the sale contract, the cooling off period ends at the end of the second clear business day after the day on which the contract was made.
- Where the vendor’s statement is served on the purchaser after the making of the contract, the cooling off period ends at the end of the second clear business day from the day on which the statement was served, or the time settlement takes place (whichever is earliest).
When Does the Cooling Off Period End in Relation to the Sale of a Small Business?
- The cooling off period in South Australia ends at the end of the fifth clear business day after the day on which the vendor’s statement is served on the purchaser, or the time settlement takes place (whichever is earlier).
If you have any questions about this, please don’t hesitate to get in contact with our experienced commercial conveyancers.
3. Domestic Building Contracts
When does the cooling off period start for domestic building contracts? It starts once the contract has been made and ends at the end of five clear business days.
Speak to a Property Lawyer
These are general statements of cooling off rights. Naturally, there are all sorts of exceptions and rules applying to cooling off periods in South Australia. A wrongful cooling off can expose you to claims for debt, damages or specific performance – so it is very important to get legal advice from a property lawyer or conveyancer before taking this step.
For further information on real estate sale contract cooling-off periods (SA), please contact Peter on 8362 6400 or email Peter Jakobsen. Join our mailing list to receive updates and advice on current issues.