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The ‘cooling off’ period |
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Apart from contracts arising out of a sale at an auction, all other contracts to buy residential real estate in Queensland, whether the property is a home or investment property, and whether it is a house, land, unit or townhouse, are subject to a 5 day cooling off period. The 5 day cooling off period starts on the day that the buyer (or their solicitor) receives a copy of the sale contract that has been signed by both the buyer and the seller (or if that day is not a working day, starts on the next working day), and ends at 5pm on the fifth working day. For example, if the buyer or their solicitor receives the signed sale contract during business hours on a Monday, then the cooling-off period will end at 5pm on the following Friday, unless of course there are any public holidays which intervene. If you decide during the 5 day cooling off period that you do not want to go ahead with the purchase of the property, then you are entitled to terminate the sale contract. However you should immediately see a solicitor if you find yourself in this position, because there are strict legal formalities that must be complied with. If you terminate a sale contract during the 5 day cooling off period, you will be entitled to get your deposit back less a ‘termination penalty’ equal to 0.25% of the purchase price stated in the contract. For example, on a property priced at $400,000, a termination penalty of $1,000 would be deducted from your deposit (that is, $400,000 x 0.25% = $1,000). The fact that you will have to pay a termination penalty if you choose to terminate a sale contract during the 5 day cooling off period means that you should not sign a sale contract in the first place unless you are sure that you do want to buy the property. You should only use the right to terminate during the 5 day cooling off period as a last resort.
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