Purchasers in Victoria are entitled to 3 clear business days from signing the contract to change their mind and withdraw from the contract of sale. When withdrawing from the contract under the cooling off provisions, the purchaser forfeits the greater of either $100 or 0.2% of the purchase price. The forfeited amount is deducted from the money “consideration” provided when signing their offer. Where the initial deposit outlaid is insufficient to cover the cooling off fee, the agent will seek the balance from the buyer.
Exercising your rights under the cooling off provisions
To withdraw from a contract of sale in accordance with the Cooling off provisions the buyer needs to provide written notice to the vendor of their intention to terminate the Contract of Sale . The notice must be served on the vendor or their legal representative before the cooling off period expires.
Exceptions to the application of the Cooling Off period
There are a few situations where the cooling off period is not applicable;
- The sale occurred via an auction or 3 clear business days before or after a publicly advertised auction
- The purchaser is an estate agent or a corporate entity (eg; a company)
- The property being purchased is 20 hectares or more and mainly utilised for farming purposes
What happens if I want to withdraw from the contract and the cooling off period has passed?
Once the cooling off period has passed, an individual may withdraw from the contract if they ensure the contract is subject to finance, building inspection and or pest inspection. A purchaser may withdraw from the contract of sale if their contract is subject to these conditions and they were unable to be fulfilled.
If the contract entered into was not subject to finance, building inspection and or pest inspection, then in accordance with the provisions of the contract the purchaser would forfeit the full deposit required under the contract which is usually 10% unless a lesser amount was negotiated prior to the signing of the contract.