Property Guideline

Cooling Off Period South Australia – How and When?

Buying a property is an important and costly transaction so buyers need to be sure they are doing the right thing. To help them, there is a cooling-off period in South Australia during which they are allowed to change their minds and back out of the deal. This is two business days from the receiving of the vendor’s statement or Form 1.

The aim of the real estate cooling-off period in SA is to give the buyer the opportunity to conduct investigations into the property they are proposing to buy to establish if there are any reasons to stop the transaction. It also lets the buyers change their minds after considering the deal.

When Does the Cooling Off Period Start in SA?

When a buyer finds a property they want to buy, an agent or salesperson will usually write the offer and negotiate the sale. The offer is submitted on a contract note that sets out the price to be paid, the required settlement date and any terms (such as the purchase being subject to a satisfactory building inspection or obtaining finance).

Form 1 documentation is usually outsourced by the Agent and prepared by a registered company such as Form 1 Adelaide Pty Ltd and supplied to the buyer with an explanation of its contents. The buyer’s rights to cool off are set out in Part B of Form 1; there is no cooling-off period for the seller since the aim is to protect the buyer. The Form 1 is usually prepared ahead of time so that it can be served to the purchaser to commence their cooling off time as soon as they have signed the Contract.

How Long is the Cooling Off Period in SA and How Does it Work?

The cooling-off period in SA is two clear business days after Form 1 is served. It does not include the day of serving weekends or public holidays. Thus, if Form 1 is served on a Thursday, the buyer has until the end of the following Monday to cancel the contract.

Notice to terminate must be given in writing to the agent or vendor and no reason has to be provided. The notice can be given in person, by leaving at their place of business, or by email, fax or post. If sent, the time of sending must be within the two-day limit.

The cooling-off period may be sufficient to arrange inspections but not to organise finance. Therefore, you are advised to do as much preparation as possible before signing a contract or at least make the contract subject to specific terms.

A vendor may require that the buyer waives their rights to a cooling off period so they’re unable to cancel the contract and have no time to reconsider. This often happens when a property scheduled for auction is bought before it takes place. A solicitor is necessary in this case to advise them of their rights when signing a contract in this way.

Cooling-off rights do not apply if you buy a property at auction if you buy a business that includes property or sometimes if the sale involves a tender or option to purchase. Companies don’t get a cooling-off period except when buying small areas of residential land.

It’s important you understand the cooling-off period and the implications of waiving it, so ensure the agent or conveyancer in South Australia explains it fully.

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