Cooling off rights

Authored by Dr Stephen Pallavicini, Lead Property Lawyer, Marie Boustani, Property Lawyer, Woolworths Group Ltd and Sara Hatcher, Consulting Principal, Keypoint Law (NSW); Lisa Gaddie, Partner, Lander & Rogers (Vic); Luckbir Singh, Partner, MacDonnells Law and Simon LaBlack, Director, LaBlack Lawyers Pty Ltd (Qld); Gary Thomas, Special Counsel and Anthony Davis, Director, McWilliams Lawyers (WA); Philip Page, Retired Partner, Mellor Olsson and Constantine Costi, Principal, Costi & Co Commercial Lawyers (SA); Tim Tierney, Principal and Sebastian Thomas-Wilson, Principal, Tierney Law (Tas); Tony Morgan, Partner and Andrew Giles, Special Counsel, HWL Ebsworth; Lyn Bennett, Consultant, Minter Ellison and Leon Loganathan, Managing Partner, Ward Keller (NT); Christine Murray, Managing Partner and Stephanie Lynch, Partner, Meyer Vandenberg Lawyers and Duncan Webber, Partner, Moray & Agnew (ACT). Updated by the LexisNexis Legal Writer team.

Cooling off rights are provided under statute in most jurisdictions.

New South Wales

Part 4, Div 8 of the Conveyancing Act 1919 (NSW) (the Act) deals with cooling off periods for residential purchasers. The cooling-off provisions only apply to “residential property”, as defined in s 66Q(1) of the Act.

Section 66S of the Act provides that a purchaser of residential property has a 5 business day cooling-off period (or a 10 business day cooling-off period in the case of an off-the-plan contract) during which the purchaser may withdraw from (or rescind) a contract. The cooling-off period may be extended or shortened — by a provision in the contract or by the agreement of the parties. If it is shortened, it still does not take effect until a s 66W certificate is provided (see below).

If a purchaser rescinds a contract during the cooling-off period, the purchaser forfeits 0.25% of the purchase price.

A statement relating to the cooling off period must be included in every contract for the sale of residential property: s 66X of the Act and reg 16 of the Conveyancing (Sale of Land) Regulation 2022 (NSW) (Regulations).