Contract Termination / COOLING OFF
What is ‘Cooling Off”?
Pursuant to Section 31 of the Sale of Land Act a Victorian purchaser can terminate a contract for the purchase of real estate by “cooling off” within 3 clear business days from the date the Purchaser signs the Contract, subject to terms & conditions.
“Cooling- Off Period” -Terms & Conditions
However the cooling off period does not apply if:-
- The property in question was brought at or within 3clear business days before or after a publicly advertised auction;
- The purchaser obtained independent legal advice from a lawyer prior to the signing of the contract;
- A contract has previously been entered into by both parties for the same property in similar circumstances;
- The property is larger than 20 hectares in size and primarily used for farming;
- The property is primarily used for industrial or commercial purposes;
- The purchaser is either an estate agent or a corporate body (i.e. company).
IMPORTANT= Remember the “cooling off” period, “3 clear business days” starts from the date the purchasers signs the contract regardless to when the vendor may sign.
“Process in Cooling Off”
Pursuant to the Sale of Land Act to “cool off” the purchaser is required to provide the vendor(s) or the vendor(s) representative Notice in writing that the purchaser(s) wishes to terminate the contract “cool off” within the 3 clear business days from the date the purchaser(s) signed the Contact.
“Costs involved in Cooling Off”
A purchaser who “cools off” must pay $100.00 or 0.2%of the purchase price whichever is the greater.
Although a purchaser may have the right to “cool off” it would be considered wise for a purchaser to carry out their full investigations prior to the signing of the contact.
Cooling off should be considered as a last resort, to be used by a purchaser when they realise they are in trouble or made an unforeseen mistake.
OUR SERVICES TO YOU
This office would be more than happy to assist you in overlooking the Vendors Section 32 Statement or assist in answering any questions you may have prior to the signing of a contract for the purchase of real estate. Simply contact this office.
SETTLEMENT
Settlement is the final stage, the event that both the vendor and purchaser have eagerly awaited.
Upon settlement the purchaser pays the balance of monies due under the Contract to the vendors as the vendors may direct, upon receipt of security documents - i.e; Title, transfer etc)
Once the documents and cheques have been exchanged and all parties to the transaction are satisfied, the matter is declared "settled:.
Settlement, date, venue and time
Settlement date is the date usually specified in the Contract. All parties to the transaction (purchasers representative, vendors representative, both parties mortgagees) agree on a venue and a time is set for settlement (usually to the vendor or the vendors mortgagee who holds the Certificate of Title).
On the agreed date, venue and time each representative attends settlement collecting documents and handing over cheques that are required and the matter is settled.
Once settled, the vendor, purchaser and selling agent are contacted and advised settlement has occurred. The selling agent can than release the keys to the purchaser.
STAMP DUTY
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