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

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

Buying property can be exciting, but sometimes circumstances change, and you may need to reconsider your purchase.

Queensland law offers protection to buyers with a cooling-off period, allowing you to terminate a contract within a set timeframe. Understanding how this cooling-off period works and what it means for both buyers and sellers is crucial to avoiding costly mistakes.

What Is the Cooling-Off Period?

In Queensland, the cooling-off period is a five-business-day window that starts when the buyer receives a copy of the signed contract from the seller. This period gives buyers the right to terminate the contract for any reason, providing essential protection against rushed or ill-informed decisions.

The cooling-off period officially ends at 5:00 PM on the fifth business day, excluding weekends and public holidays. For example, if you receive the contract on a Monday, the cooling-off period will end at 5 PM the following Monday, counting only business days.

When Does the Cooling-Off Period Not Apply?

While the cooling-off period protects many residential buyers, there are exceptions:

• Auction sales: No cooling-off period applies once you win an auction.
• Purchases made after unsuccessful auctions, if you were a registered bidder at the auction.
• Option contracts or sales resulting from them.
• Buyers purchasing three or more lots simultaneously.
• Purchases by publicly listed corporations, their subsidiaries, or government bodies.

Also, some contracts may waive or shorten the cooling-off period if all parties agree in writing, so many people find it helpful to have their solicitor or conveyancer in Cairns review the contract before signing.

How to Terminate Within the Cooling-Off Period

If you decide to terminate during this period, you must:

• Provide written notice of termination to the seller or the seller’s agent by 5 PM on the fifth business day.
• The notice should clearly state your intention to terminate under the cooling-off provisions and include your name, the property’s address, and contract details.
• Deliver your notice by a method that provides proof of receipt, such as email, registered mail, or in-person delivery.

Failing to meet the deadline or delivering notice improperly can mean losing your deposit. By seeking advice from a buyer’s conveyancer, you can stay on top of deadlines and make sure you meet all compliance requirements.

What Happens to the Deposit?

When you terminate within the cooling-off period, the seller can deduct a termination penalty of up to 0.25% of the purchase price from your deposit. The remaining deposit must be returned to you within 14 days.

It’s important to note:

• The penalty is capped at 0.25% of the purchase price, not the total deposit amount.
• If your deposit was less than 0.25%, the seller can only keep the deposit amount paid.
• Sellers cannot claim additional compensation beyond this penalty during the cooling-off period.

Sellers should ensure deposits are set at appropriate amounts upfront to cover potential termination penalties.

Cooling-Off Period: Buyer and Seller Perspectives

For Buyers, the cooling-off period provides a critical safety net, allowing you time to arrange finance, conduct inspections, or reconsider your decision without losing your entire deposit. However, it should not be treated as a fallback plan, as improper termination can lead to financial loss or legal disputes.

For sellers, understanding your rights during the cooling-off period helps you manage potential risks. If a buyer terminates, you can keep the termination penalty but must promptly return the remainder of the deposit. Preparing contracts and deposits properly – often with guidance from a

sellers conveyancer – protects you from unexpected losses.

Can the Cooling-Off Period Be Waived?

Yes. Buyers can waive or shorten the cooling-off period with written agreement from all parties. While this can expedite transactions, consider the risks before waiving your rights.

Why Seek Legal Advice?

The cooling-off period involves strict deadlines and formal procedures. Missing a step can lead to significant financial consequences. Whether you are buying or selling, professional advice from a

Solicitor in Cairns or a conveyancer ensures your rights are protected and the process is handled correctly.

Need Help With Your Property Journey?

Whether you’re buying or selling property in Cairns, understanding your legal rights and obligations is essential to a smooth transaction. If you have questions about contracts, the cooling-off period, or need tailored advice, our expert conveyancing for sellers are here to guide you every step of the way.

Don’t navigate complex property laws alone – get clear, practical help from a trusted team who understands Cairns real estate inside and out.

Contact our friendly team today to protect your interests and move forward with confidence.

Disclaimer: This blog is intended for informational purposes only and does not constitute legal advice. For guidance tailored to your specific circumstances, please consult a qualified legal representative.