Before purchasing property in Victoria, it’s crucial to fully understand your rights, especially when it comes to the cooling-off period. This period provides you with the time to reconsider your decision after signing a property purchase contract, allowing you to change your mind if necessary.

What Is a Cooling-Off Period?

A cooling-off period is a legally mandated timeframe that allows buyers to cancel a contract of sale without facing significant penalties. In Victoria, this period starts from the moment you sign the contract (not when the seller signs) and lasts for three clear business days. It’s important to note that “clear business days” exclude weekends and public holidays.

This period gives buyers the chance to review their decision and ensure they feel confident in making such a significant financial commitment.

Key Details About the Cooling-Off Period:

• Starts Immediately: The cooling-off period begins as soon as you sign the contract, even before receiving it from the seller.
• Termination Penalty: If you choose to cancel the contract during the cooling-off period, a penalty of 0.2% of the purchase price will be deducted from your deposit. For example, for a $500,000 property, this would be $1,000.
• Exceptions to the Rule: The cooling-off period does not apply if:
  • The property was bought at a public auction.
  • The sale occurred within three business days before or after a publicly advertised auction.
  • The buyer is an estate agent or a corporate entity.
  • The property is over 20 hectares and primarily used for farming.
  • The property is used for industrial or commercial purposes.
  • You and the seller previously signed a contract for the same property on similar terms.

How to Exercise Your Cooling-Off Rights:

To cancel the contract during the cooling-off period, you must provide written notice to the seller or their representative within three business days. This notice can be delivered in person, via email, or by fax. Ensure you act within this timeframe to avoid any issues.

If you don’t exercise your cooling-off rights within the specified period, the contract becomes binding, and you must proceed with the purchase unless other terms or conditions allow for cancellation.

Why Is the Cooling-Off Period Important?

The cooling-off period serves as an essential consumer protection mechanism, giving buyers time to reflect before making a final commitment. It allows you to:

• Consult Professionals: Discuss any concerns with a conveyancer or solicitor.
• Organize Finances: Ensure that your financial arrangements are in place without any unexpected loan issues.
• Conduct Further Research: Reflect on the property, its location, and any other factors that could influence your decision.