Cooling-off and the building inspection report

The window after signing

New South Wales: a report inside the five days

NSW’s pages talk the buyer through it step by step. In NSW Fair Trading’s words, “The cooling-off period starts as soon as you exchange and ends at 5pm on the fifth business day after the day of exchange”; exchange at 10am on a Tuesday, and it ends at 5pm on Tuesday the following week. NSW Fair Trading’s buyer guide then says:

“To get a building inspection done during the cooling–off period, give the consultant as much notice as possible. They will have to do the inspection, prepare the report and still give you time to decide and potentially withdraw from the contract.”

NSW Fair Trading, pre-purchase inspection reports

Withdrawing in that time takes written notice and costs 0.25% of the purchase price, which NSW works out as $250 for every $100,000. There is no cooling-off period if you buy at auction, or exchange on the day of the auction after the property is passed in. A buyer can also waive the period with a ‘66W certificate’, and then there is no window left to fit a report into.

Queensland: before negotiating, or a condition

The standard Queensland contract comes with a 5 business day cooling-off period. It starts on the day you get a copy of the contract signed by both parties, or the next business day if that falls on a weekend or public holiday, and ends at 5pm on the fifth day. Auctions have no cooling-off period, and nor does a private treaty contract made within 2 business days of an unsuccessful auction of the property at which the buyer was a registered bidder. To cancel, you give the seller or the seller’s agent signed written notice that reaches them before 5pm on the final day. A buyer can waive or shorten the period by written notice to the seller or their agent. If you cancel, the seller must refund the deposit within 14 days and may deduct a penalty of up to 0.25% of the purchase price.

Queensland’s advice does not lean on the window. The Office of Fair Trading says to arrange property inspections before you start negotiations, so you can factor any future costs into your offer. Where that is not possible, it points to contract terms that let you cancel over poor reports, covered under building and pest conditions.

Victoria and South Australia: shorter windows

Victoria. Three clear business days apply to private sales of residential and small rural property, counted from the date you sign the contract, not the date the seller signs it. Cooling off returns any money paid, less $100 or 0.2 per cent of the price, whichever is greater. It does not apply if the property was “purchased at a public auction or within three clear business days before or after a public auction”, if the property is used mainly for industrial or commercial purposes, if it is more than 20 hectares and used mainly for farming, if you had already signed a contract on the same terms for that property, or if the buyer is an estate agent or corporate body. Consumer Affairs Victoria’s inspection advice is set before the signature: “Before signing a contract of sale, consider engaging a qualified building inspector, surveyor or architect to provide a professional building inspection report.”

South Australia. “In a sale by offer, you have a cooling-off period where you can do further inspections or reconsider the purchase.” The period is 2 clear business days. There is none if you buy at auction, and none if the home is passed in and you sign a contract for it that same day, having bid at the auction yourself or had someone bid for you. A successful offer made before an auction does carry a cooling-off period; waiving it takes a prescribed form, signed by an independent legal practitioner, stating that you have been advised of your cooling-off rights. The SA law requires that advice to come before you enter into the contract. You cannot cool off once settlement has occurred.

The ACT: the window, with the reports already attached

The ACT law gives buyers of residential property a cooling-off period on every sale contract, ending at 5pm on the fifth working day after it begins. Access Canberra lists the cases where it does not apply, including these:

• “the property was purchased on the same day as a public auction at which the property was passed in and you were a registered bidder”
• “you are a corporation”
• “the property was sold at auction or by tender”.

A buyer may waive the period, but only before entering into the contract, or shorten it. Either way the buyer needs legal advice from a lawyer who is not acting for the seller, a certificate signed by that lawyer, and a copy of it given to the seller. Withdrawing within the period costs 0.25% of the purchase price, “which is equal to $250 per $100,000”. The difference in the ACT is that the seller’s building and pest reports come with the contract before you make an offer; the ACT seller’s reports page explains them.

Western Australia and Tasmania: no window to rely on

Western Australia. Consumer Protection WA reminds buyers that real estate contracts in WA carry no mandatory cooling-off period. Its advice is to make the contract conditional on a satisfactory building inspection when you sign.

Tasmania. The Property Agents and Land Transactions Act 2016 does not require a cooling-off period for residential sales, and the regulator adds that the Act does not require defects to be disclosed either. A review of the standard form contract added vendor disclosure and cooling-off periods as options the parties can choose to use. The regulator recommends a pre-purchase inspection before you buy.