KEY TAKE OUTS:
- The Purchaser of residential property in NSW are legally entitled to a cooling off period of 5 days minimum
- The Purchaser of off the plan property in NSW are legally entitled to a cooling off period of 10 days minimum
- The cooling off period does not apply to auctions, rural land, commercial, land with more than two dwellings on it in NSW or vacant land not intended for development of a residential house
- The cooling off period an be waived with a Section 66W Certificate signed by a Licensed Conveyancer/Solicitor only
What is a Cooling Off Period
When you purchase residential property in NSW you are legally entitled under the Conveyancing Act 1919 (NSW) to a minimum of 5 business days “cooling off” period. If you purchase off the plan the minimum cooling off period is 10 business days.
The cooling off period for NSW property starts from the date of exchange and expires at 5pm on the fifth or tenth business day after the day you exchange. For example, if a contract is exchanged on a 5 day cooling off period on a Monday, the cooling off period would expire at 5pm the following Monday.
During the cooling off period, you can rescind (effectively cancel) the Contract by providing written notice, however, you will forfeit the 0.25% deposit paid to the vendor.
If you intend to proceed with the purchase, you will be required to pay the balance of the deposit prior to the expiration of the cooling off period. Once the cooling off period expires you will be locked into the Contract and must complete the purchase.
Does the Vendor have a Cool Off Right
A vendor does not have any right to rescind the Contract during the cooling off period, it is a right solely held by a purchaser. The vendor is locked into the Contract immediately on exchange.
Exemptions where there is NO Cool Off Rights
No cooling off period applies for property purchased at auction, rural land (2.5 hectares or more), property with more than 2 dwellings, commercial properties or vacant land NOT intended for development of a residential house.
Waiving the Right to a Cooling Off Period
A purchaser can waive their right to a cooling off period by having their conveyancer/solicitor provide a Section 66W Certificate to the vendors representative. If this occurs prior to exchange, you are immediately locked into the Contract on exchange and unable to rescind.
Extending or Reducing the Cooling Off Period
A purchaser can reduce the cooling off period at any time after it has begun by having their conveyancer/solicitor provide a Section 66W Certificate to the vendors representative. Once this has been submitted you are immediately locked into the Contract and unable to rescind from this time.
You can request a cooling off period be extended at any time during the cool off by having your conveyancer/solicitor request same and, if agreed by the vendor, it will then be extended. The vendor is not obligated to agree to any request for extension.
What is the Cooling Off Period used for
During the cool off period purchasers are able to obtain and review any pest and building or strata reports for the property.
The cool off period also provides time for a purchaser’s bank to perform required checks and valuations in order to provide a final and unconditional loan approval for the purchase, as well as arrange loan documentation etc.
It also gives a purchaser time to have the Contract reviewed and explained to them by a conveyancer/solicitor. It also provides time for the conveyancer/solicitor to make any requests with the vendors representative in relation to the Contract terms or requests in relation to pest and building reports or any further investigations as required e.g. to have the vendor accept a 5% deposit instead of 10% or to have an issue fixed prior to completion or to have an allowance provided in favour of the purchaser to allow them to attend to fix an issue after completion.
Once unconditional loan approval, responses to any enquiries are received and the purchasers have met with a conveyancer/solicitor, they can then make an informed decision on whether or not it is in their best interest to proceed with the purchase or rescind.
ABOUT KAY VITOGIANNIS:
Kay joined the Coutts team in May 2021 working as a Licensed Conveyancer within our Property & Conveyancing team, based in our Narellan office.
Kay has over 20 years of experience in the Legal industry. She began her journey in CBD Conveyancing firms as a secretary and attained her Advanced Diploma in Conveyancing in December 2010.
For further information please don’t hesitate to contact:
Kay Vitogiannis
Licensed Conveyancer
info@couttslegal.com.au
1300 268 887
This blog is merely general and non specific information on the subject matter and is not and should not be considered or relied on as legal advice. Coutts is not responsible for any cost, expense, loss or liability whatsoever in relation to this blog, including all or any reliance on this blog or use or application of this blog by you.
