While nobody involved in real estate transactions enjoys enforcing cooling-off provisions, they do offer a valuable safety net when buying a house, enabling the buyer to cancel the contract if necessary.

‘Cooling-off period’ is a brief interval allowing buyers to reassess their decision without facing severe legal or financial repercussions or penalties. It’s particularly relevant in property sales, where the stakes are high, and decisions are often made under pressure. The cooling-off period commences as soon as the buyer receives a signed contract of sale as it outlines the transaction terms and the purchase price.

The cooling-off period applies y to residential property sales. In South Australia, this period is two full business days after the contract is received and the purchaser has been served the Form 1 by the vendor.

There are specific ways to exercise your cooling-off rights. There are also certain circumstances under which a cooling-off period may not apply.

Read on to learn all about the cooling-off period in South Australia and how to get it right.


Cooling off Period in Real Estate: what are my rights?

It’s important for everyone involved in buying or selling a house – buyers, sellers, and real estate agents – to really understand how the cooling-off period works. This helps everyone know what they can and can’t do and keeps the property buying process clear and fair. Even though the idea of a cooling-off period seems simple, it can be complex in certain situations.

Buyers’ rights

Firstly, you only have the benefits of ‘cooling off’ if you are buying, not selling a property. And it does not apply in the case of a property bought at auction.

When buying a residential property, buyers often make commitments based on limited information and time pressure. The cooling-off period acts as a safeguard against rushed or ill-informed decisions. It gives you time to assess your decision, conduct a proper building and pest inspection, and ensure financial arrangements are in order.

How long is the cooling off period in South Australia?

Under South Australian law, property buyers can withdraw from the sale contract at any time during the first two clear business days after they have been ‘served’ the Form 1.

In other words, if you are served with the Form 1 on a Friday before a long weekend, you have until the end of Wednesday to cool off because weekends and public holidays do not count in the cooling off period in South Australia and neither does the day you were served the Form 1.

The benefit of the cooling off period when you’re buying a house is that you have time to get extra building inspections done and do further thinking to make sure you are making a sound decision. There is not enough time to arrange finance during a cooling off period so our advice has always been to have that in place first or to make sure the contract is subject to finance approval.

Sellers’ rights

Sellers do not have the same rights as buyers. They set the contract of sale terms, including the purchase price. Also, sellers have the opportunity to consider offers from multiple buyers. Therefore, they do not need the protection that a cooling-off period offers to a buyer.

Once the contract has been signed by both parties, Form 1 has been served, and the two full business day cooling off period has finished, the purchaser must go through with the transaction under the conditions and purchase price agreed to by both parties.

When does the cooling off period not apply?

As with all legal issues, there are bound to be exceptions and there are instances where cooling off does not apply. These include:

  • Properties bought at auction
  • Properties bought by companies (although new provisions made in 2014 extend some protection to companies under some circumstances. We will write more on that later)
  • Properties bought through a tender process
  • Where the purchaser had opted to ‘waive’ their right to a cooling off period

How to ‘cool off’ on a purchasing property

It is important to note that you do not need to give a reason for cooling off (choosing not to go through with the purchase of the house). However, you must cool off in an appropriate way by providing the cooling off notice in writing. You can do this by:

  • Writing to the vendor or real estate agent stating you do not wish to be bound by the contract
  • Faxing the vendor or their agent with your notice
  • Handing your notice to the vendor or their sales agent in person
  • Leaving your notice at the sales agent’s office
  • Posting your notice to the vendor’s address by registered mail

However, the widespread use of email means that as of the first of January, 2014, you can also cool off by email.

Our advice is to make sure you keep a copy of the email and have evidence that it was sent because the onus is on you to prove you sent it should there be a dispute.

The purchaser’s rights to ‘cool off’ are set out in Part B of the Form 1 [Land and Business (Sale and Conveyancing) Regulations 2010 Schedule 1].

Provided you cooled off appropriately, any deposit you had paid, of more than $100, will be refunded to you.

There are other factors involved in cooling off, which is why we suggest you build your relationship with your conveyancer as early as possible in the real estate buying process. Your conveyancer can guide and advise you during the process.

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