“Cooling Off” – Should you tick the box?
In early 2017 the REIT and Law Society of Tasmania approved Standard Form of Contract of Sale was updated to include an option for Purchasers to opt into a ‘Cooling Off Period’. This brought Tasmania in line with other States and Territories of Australia. The ‘Cooling Off Period’ is a period of three (3) business days from the Date of Contract (that is, the date the last party signs the contract) where the Purchaser may terminate the contract without penalty. If a deposit has already been paid, it will be returned.
Reliance on this clause is particularly useful if a prospective Purchaser is attending multiple open homes over a weekend and wishes to put in multiple offers on different properties as they attend. If the box ‘Confirming reliance on the Cooling Off…’ period is ticked on each offer the Purchaser can later reflect on the multiple offers, seek legal advice and then, without penalty, terminate the undesirable contracts within that three day period leaving the best contract on foot.
If you are sure that you wish to proceed with a contract, have sought legal advice and have only had one offer accepted, you may decide to ‘Waive’ reliance on this clause by simply ticking the appropriate box.
It is important to note that although you may be relying on the ‘Cooling Off Period’ your other conditions of the contract, such as ‘Subject to Building Inspection’ or ‘Subject to Finance’ clauses, fall due upon the expiry of specified timeframe within those clauses from the Date of Contract and not the expiry of the ‘Cooling of Period’ (unless otherwise specified in your contract).