Can you change your mind after buying a house?
If you are ready to buy residential property in Queensland or in the process of signing a house and land contract it is essential that you know exactly what you are getting yourself into.
Conveyancing is rarely straight forward therefore it is best to contact a qualified property solicitor to safely navigate you through the process and avoid any costly mistakes or misunderstandings.
River City Conveyancing is one of Brisbane’s most trusted Conveyancing firms with a dedicated team to help you understand all of your rights and obligations when purchasing a new home.
Contract Termination & The Cooling Off Period
What is the 'cooling off' period when signing a REIQ contract?
In Queensland the cooling-off period is an initial phase at the beginning of a conveyance where the Buyer can rightfully withdraw from the contract and cancel the transaction for any valid reason. The duration extends from the moment the Buyer has received the signed contract and ends five business days after at 5:00 pm on the fifth day.
This period protects Buyers from purchasing a property that they discover is not worth the asking price of the Seller. This may be after any pre-sale building inspections reveal the property needs expensive repairs, has soil damage, has pest or termite infestation and/or structural integrity flaws, or for any reasons that were not originally disclosed by the Seller. Even if the Seller is unaware of the property issues the Buyer is able to cancel the contract.
When can a cooling off period be waived?
According to the Queensland Law Society a cooling off period can only be waived if all parties agree to it in writing. The Buyer may waive or shorten the cooling-off period by stating in writing that they 'waive the cooling off period entirely' or that 'the cooling off period will end at 5:00 pm on the new day'.
How to cancel or terminate a contract during the cooling off period?
The Buyer must give to the Seller a notice in writing by 5:00 pm on the 5th business day of the cooling off period. This can be delivered in person, email or fax.
THE DEPOSIT
What happens to the deposit after contract termination?
The Buyer must always pay the deposit according to the terms set out in the contract. The deposit is usually held in a trust account by the Seller's Agent or Solicitors. The Seller is not entitled to the money until the settlement day of the contract. The Buyer is only entitled to the money if they have rightfully cancelled the contract under the correct conditions according to the contract.
If the contract is terminated by the Buyer during the cooling off period the Seller may deduct a penalty of up to 0.25% of the purchase price from the deposit and has 14 days within which to refund the rest of the deposit to the Buyer.
For example if the purchase price is $200,000.00 than the deducted penalty may be up to $500.00
Can a Seller pull out of the REIQ contract?
Once a residential contract has been signed by both the Seller and Buyer it is deemed legally binding by all parties. For a Seller to pull out of a sale it would be a complex and potentially costly procedure as they will be breaking the terms of the contract. Breaking a contract of Sale puts you at serious risk of penalties, additional fees and being sued by the Buyer. We strongly recommend you speak with a Conveyancing Solicitor today before signing any new REIQ contract to ensure you understand your rights and obligations when selling property.
AUCTIONS
Do auctions have cooling off periods?
Please Note the cooling off period does not apply to properties sold at auction and also may not apply if the contract provides that it does not apply. This is an extra clause sometimes included in a contract but often is not brought to the attention of the Buyer when the contract is signed.
The following transactions are exempt from a cooling off period:
- a sale by auction
- a sale that has taken place after an unsuccessful auction (before 5:00 pm on the second business day) if the buyer was an initial registered bidder in the auction
- an 'option contract' or a sale contract formed as the result of an option contract. All options relating to land must be in writing and signed by all parties.
- if the Buyer is a publicly listed corporation (or their subsidiary), is the State or a statutory body, or is buying at least 3 lots at the same time (whether or not in the same contract).
What are unfair contract terms in a residential contract?
There are national and state laws in QLD that protect Buyers from what are deemed to be unfair contract terms. By definition these are:
The real estate market in Queensland has it’s own legislation and legal protocol that can be difficult to make sense of if you’re unfamiliar with the conveyancing terms and clauses. Before you sign anything we recommend that you find a conveyancing solicitor to review the contract terms to ensure your rights and interests are protected.
Contact the River City Conveyancing offices today for expert legal guidance on 07 3013 2300 or email reception@rivercityconveyancing.com.au