When purchasing a residential property in Queensland (other than at an auction), the standard contract of sale provides the buyer with a five day cooling-off period, during which time the buyer is free to cancel the contract at any time, for any reason, including a change of mind.
Buyers do not need to provide a reason to the Seller for cancelling the contract, providing advice to the seller, or their solicitor, of the cancellation itself is sufficient. This cooling-off period is in addition to any special conditions that are inserted into the contract.
The five day cooling-off period does not commence the day the buyer signs the contract of sale, rather it commences the day the buyer, or their solicitor, receive back the signed contract from the seller, their solicitor, or the agent, after it has been signed by both parties.
Where the buyer receives this contract on a weekend, or a public holiday, the cooling-off period commences on the following business day. This five day period is also a five business day period, meaning that weekends, or public holidays, that fall within this period are in addition to the five business day period.
The date the cooling-off period begins may be different to the contract date. Where this is the case the date it commences will not be written on the contract, so it may be necessary to have a form of proof of its commencement date. Where a dispute arises it is the responsibility of the seller, or their representative, to prove the date the contract was delivered to the buyer. This may be a written receipt, a fax receipt, or an email.
Cancelling the Contract of Sale:
If the buyer elects to cancel the contract they must provide written notice to seller, or their solicitor prior to 5pm on the 5th day of the cooling-off period.
Upon receiving notice of the buyer’s decision to cancel the contract, the seller must refund the deposit to the buyer within 14 days.
If the buyer does elect to cancel the contract during this time though, the seller can impose a financial penalty upon them in the amount of 0.25% of the purchase price, taken from the deposit. This penalty is imposed at the discretion of the seller and they can choose to return the full deposit amount to the buyer. The deposit amount, less this penalty amount if imposed, must then be returned to the buyer.
This five day cooling-off period can be waived or shortened by the buyer. Changes to Queensland’s property laws mean that a PAMD Form 32a Lawyer’s Certification is no longer required to waive, or shorten this period. From December 1, 2014 the buyer can waive the cooling-off period much more simply, only needing to provide written notice to the seller, or their solicitor of their intention.
This cooling-off period does not apply where a property is purchasing as part of an auction. However, where the property is passed in at auction and the buyer and seller subsequently negotiate an agreement and enter into a contract of sale, then the cooling-off period will apply.