When purchasing property in South Australia by private treaty, buyers are generally entitled to a cooling off period. The cooling off period can be used by the buyer to conduct further building or pest inspections or ensure the decision to purchase wasnʹt made in haste.
The cooling-off period expires at the end of the second clear business day after:
- the contract was made if the buyer received the Form 1 prior to making the contract, or
- the Form 1 has been served on the buyer if the buyer received the Form 1 after making the contract. By law, a Form 1 must be served on a buyer.
A Form 1 includes important information about the property such as the title particulars, covenants, zoning and other encumbrances. Although a buyer is entitled to withdraw from a contract within the cooling off period, the vendor is bound upon entering into contract with the buyer.
Once the cooling off period has expired and provided there are no other conditions in the contract, the buyer is bound to the contract and must pay a deposit. A settlement date will have been negotiated and the buyer is obliged to follow through with the purchase.
If the buyer decides to withdraw from the sale during the cooling off period, they must issue a cooling off notice in writing to the vendor or the vendorʹs agent before the period expires. This must be done in person, by registered mail or by fax. ‘In personʹ means physically handing the real estate salesperson or vendor the notice. Simply leaving it at the office does not constitute acceptance of the advice. Clear details of ‘how toʹ cool off are outlined in the Form 1.
When considering the purchase of a property by private treaty, you should confirm with the salesperson handling the sale that a cooling off period will be applicable.
In some cases, cooling off rights are not available when purchasing property. For example, if a buyer pur- chases at auction, in the name of a company, by assignment or, by tender or option to purchase, they will not have cooling off rights. If you have specific questions about the cooling period, speak to the real estate salesperson handling the sale.