Cancelling a Property Contract Before and After the Cooling-Off Period in QLD

With the property market becoming increasingly competitive across Queensland, many buyers are feeling the pressure to act quickly when securing a home. But what happens if you commit too soon and later need to cancel the transaction?

Here’s what you need to know about cancelling a property contract during the cooling-off period in Queensland.

What is the Cooling-Off Period?

In Queensland, the cooling-off period gives residential property buyers the right to cancel a contract after it is signed.
The cooling-off period begins when the buyer receives a signed copy of the contract and ends at 5:00 pm on the fifth business day following receipt.

The purpose of the cooling-off period is to protect buyers who might uncover serious concerns with the property, such as structural defects, pest infestations, or issues that affect future construction or landscaping. Even if the seller is unaware of these problems, the buyer may still terminate the contract within the allowed time.

Key exclusions where the cooling-off period does not apply:

• Properties purchased at auction

• Sales following an unsuccessful auction where the buyer was a registered bidder

• Option contracts or contracts formed as a result of exercising an option

• Purchases involving three or more lots at once

• Purchases made by publicly listed companies, government bodies, or statutory authorities

Occasionally, a contract may contain a clause waiving the cooling-off period. Buyers should always review their contract carefully with a solicitor or conveyancer before signing.

Can You Cancel a Property Contract During the Cooling-Off Period?

Yes, in Queensland, you can cancel a property contract during the cooling-off period for any reason at all.
You do not need to identify a fault with the property, provide supporting evidence, or even explain your decision.
The right to cancel is automatic and unconditional during this time.

To validly cancel, you must:

• Provide written notice to the seller (or their solicitor/agent), clearly stating your intention to terminate the contract

• Ensure the notice is received before 5:00 pm on the fifth business day after you receive the fully signed contract

The cooling-off period is specifically designed to protect buyers, giving them time to reconsider their decision without needing to justify a change of mind.

Can the Cooling-Off Period Be Waived?

Yes. Buyers have the right to shorten or waive the cooling-off period, but this must be done with a written agreement between both the buyer and seller.
It’s essential to seek legal advice before waiving your cooling-off rights, as doing so removes a critical layer of protection.

Can You Cancel a Property Contract After the Cooling-Off Period?

In Queensland, cancelling a property contract after the cooling-off period has ended is much more difficult, but not impossible.

Once the cooling-off period expires, you cannot simply withdraw from the contract without consequences.
You may only cancel if you have a legal right to do so under the terms of the contract, such as:

• Failing to obtain finance approval by the due date (if the contract is subject to finance)

• Discovering serious issues in a building or pest inspection (if inspections are a condition)

• Identifying problems in title searches that materially affect the property

• The seller is breaching the terms of the contract

If none of these conditions apply, attempting to cancel could be seen as a breach of contract.
This may result in you losing your deposit and being liable for additional damages claimed by the seller.

For this reason, it’s critical to get legal advice before taking any steps to terminate a contract after the cooling-off period.

Step-by-Step Guide to Cancelling a Property Contract During the Cooling-Off Period

If you decide to terminate a property contract during the cooling-off period in Queensland, follow these steps:

1. Check Your Contract Dates

Confirm the exact date you received the fully signed contract.
Count five clear business days to calculate when your cooling-off period ends.

2. Seek Legal Advice

Contact your solicitor or conveyancer as soon as possible.
They can review your situation, confirm your rights, and prepare the correct termination notice to avoid any costly mistakes.

3. Prepare a Written Termination Notice

Draft a simple, clear written notice stating that you are terminating the contract under the cooling-off provisions.
Your legal representative can help ensure the wording meets legal requirements.

4. Deliver the Notice Properly

Ensure the termination notice is delivered to the seller (or their solicitor/agent) before 5:00 pm on the fifth business day.
Email is often acceptable, but check if the contract specifies a preferred method of service.

5. Confirm Receipt

Request written confirmation that the seller (or their agent) has received your termination notice on time.
Keeping proof of delivery is important in case of any disputes.

6. Finalise the Deposit Refund

After termination, arrange for the return of your deposit.
Be aware that up to 0.25% of the purchase price may be deducted as a termination penalty.
The balance should be refunded to you within 14 days.

What Happens to the Deposit If You Cancel?

When you enter into a property contract, the deposit is usually held in trust by the seller’s solicitor or the real estate agent. It is only released after the settlement is completed.

If you terminate during the cooling-off period:

• The seller is entitled to retain a termination penalty of up to 0.25% of the purchase price.

• The balance of the deposit must be refunded to the buyer within 14 days.

For example, if the purchase price was $500,000, the seller could keep up to $1,250 as a penalty, with the remaining deposit refunded.

Final Advice

The cooling-off period provides a valuable opportunity for buyers to reassess their decision after signing a contract.
If you are considering cancelling, it’s essential to act quickly, understand the deadlines, and seek professional advice to protect your legal and financial position.

If you are buying or selling property in Queensland, consulting an experienced conveyancer or solicitor early can help ensure you understand your rights and responsibilities under the contract.