From 1 March 2012, purchasers who obtain legal advice prior to entering into a Contract of Sale will no longer lose their cooling off rights. 

This small but important amendment to section 31 of the Sale of Land Act 1962 is one of many improvements to consumer rights contained in the Consumer Affairs Legislation Amendment (Reform) Act 2010.

Previously, purchasers who consulted with a solicitor about their proposed purchase before signing the contract did not have the right to withdraw from the contract.  This contrasted with the rights of those who sought advice from a licensed conveyancer or those who did not seek advice at all, who were able to exercise their cooling off rights within three clear business days after signing the contract.

Purchasers will now be able to end the contract within 3 clear business days of the day the contract is signed, unless one of the following exceptions applies:

• they bought the property at or within 3 clear business days before or after a publicly advertised auction;
• the property is used mainly for industrial or commercial purposes;
• the property is more than 20 hectares in size and is used mainly for farming; or
• the purchaser and the vendor previously signed a similar contract for the same property; or
• the purchaser is an estate agent or a corporate body.

If the cooling off right is exercised, purchasers will still to be entitled to a refund of the whole of the deposit they paid except for $100 or 0.2% of the purchase price (whichever is more).

The ability to withdraw from the contract during the cooling off period should always be used as a remedy of last resort and should not be relied on, especially as solicitors often do not receive Contracts of Sale from estate agents until after the cooling off period has expired.

We continue to encourage all prospective purchasers to seek the advice of a solicitor prior to entering into the contract.  We are experienced and highly skilled at identifying potential problems with Contracts of Sale (and negotiating amendments to special conditions where necessary), which may save you significant headaches and costs down the track.

We provide pre-purchase advice on a no-obligation basis for a small fee.  The fee is refunded if you subsequently purchase the property and use our services for your conveyancing.

This article is intended to provide general information only and is not a substitute for legal advice. To obtain legal advice tailored to your situation please contact our office on {addressdetail telephone}.

Author:

{authorimage kmurphy}