What is a “cooling off” period?

The cooling off period is a statutory right protecting consumers which is embodied in most standard contracts of sale in most States. The cooling off period varies depending on the State and there are always some exceptions to the rule, for example, cooling off generally does not apply to auction contracts. It is important to consult with your conveyancing lawyer to confirm whether the cooling off period would apply to you.

If the cooling off period does apply and you want to rely on it to walk away from the contract, you must be prepared to pay the relevant penalty to the seller for exercising your right. This penalty is also allowed in the statutory provisions as a way of protecting the seller from disingenuous buyers.

It is important to also ensure that the cooling off notice is properly served (delivered) on the seller and / or their representatives. Remember that if it is not done properly, it could result in you losing your rights under the cooling off period, leaving you still bound to complete the contract. If you are unable to complete after the lapse of the cooling off period, you’ll be risking your full deposit rather than just the cooling off penalty.