How Have Changes to the Residential "Cooling Off" Law Affected a Buyer?
For most people, the acquisition of their first property can be a daunting proposition and, in fact, can represent the single biggest purchase they will ever make. As a consequence, it's not surprising that many people approach this with some trepidation, and even though they may have fallen in love with the property that they are about to buy, they may think about changing their mind up until the very last moment. This is why the Australian courts introduced legislation many years ago to allow would-be buyers to have second thoughts, even if they had agreed to buy the property. These laws did come with some restrictions, although there has been a significant change and a loosening-up of those restrictions in recent times. What has changed and what should you be aware of?
This law provides a buyer the opportunity to "cool off" if they change their mind within a certain time frame following their decision to buy the property. It varies from state to state, although it is largely the same across the country and applies to somebody who is considering the purchase of residential property.
Typically, within three business days of signing a contract to buy the property, the purchaser can withdraw, and it is irrelevant whether the vendor has actually countersigned the written offer to essentially accept it or not. This type of safeguard is, however, not available for anyone who has purchased a property at an auction, and it is also not available when the property in question can be classified as commercial.
It should be noted that the definition of three business days does not include the actual date of sale, or the date that you signed the contract.
A number of changes have been made over the years to the basic law. For example, at one time it wasn't possible to exercise this right if you had been advised by competent legal counsel before signing any contract. This particular restriction was removed several years ago.
The most recent changeinvolves notification and specifically any notice given to a real estate agent working on behalf of the seller. Up until this change, any cooling-off notice was not classified as having been delivered if it was sent to the real estate agent. Today, you can serve such notice at their address and will be completely covered by the law.
Taking the Right Approach
While it is always best to be 100% certain before entering into any type of contract, it's understandable that a first-time buyer might want to change their mind. If you find yourself in this position, it's always best to get advice from an independent legal counsel to make sure that you are doing everything properly. Contact property lawyers for additional information.