Cooling-off and contracts in South Australia

A South Australian buyer gets two clear business days to cool off, counted from service of the Form 1 vendor's statement or from signing, whichever comes later. That start rule is why the paperwork matters here: the clock does not run until the vendor's disclosure has been served. The deposit paid at signing is a token sum fixed by law.

The cooling-off period

The cooling-off period expires at the end of the second clear business day from the day the Form 1 is served on the purchaser. Weekends and public holidays do not count, and neither does the day of service. Where the contract is signed after the Form 1 arrives, the period runs from the signing instead: SA.GOV.AU puts it as whichever happens last.

To use it, the purchaser serves written notice on the vendor or the agent stating that he or she does not wish to be bound by the contract. No reason has to be given. Any deposit paid of more than $100 must be refunded, so the most a buyer can lose by cooling off is the token deposit.

This research found no separate cooling-off rule for an off-the-plan purchase. SA.GOV.AU's offers, auctions and off-the-plan page is the place to check before signing one.

When there is no cooling-off

There is no cooling-off period if the property is bought at auction. The right can also be given up, but only through a prescribed form signed by an independent legal practitioner. The form states that the buyer has been told of their cooling-off rights. The Form 1 itself sets out the right and carries the space for that certificate.

Whether other exclusions apply, for example to a contract signed soon after a failed auction or to a corporate buyer, was not returned in this research. They would sit in the Land and Business (Sale and Conveyancing) Act 1994, which is still to be opened.

What the seller must give you

The Form 1 is the vendor's statement. It sets out the buyer's cooling-off rights and important information about the property: title details, mortgages on the property, easements, zoning and outgoings such as water rates. It is signed by the vendor and must be factually accurate and complete.

The Law Handbook explains why the two rules are linked. The Form 1 discloses particulars that may bear on the decision to buy, and the cooling-off period gives the buyer time to read them. An easement across the block, a mortgage still to be discharged, or a zoning that limits what can be built are the kinds of thing it exists to surface. What follows if a Form 1 is missing or wrong was not returned in this research; the Law Handbook's Form 1 chapter is the place to look. A government-published example of a completed Form 1 shows what the attachments look like.

The contract, the deposit and settlement

The law allows only a token maximum deposit of $100 on signing a contract to purchase. The agent may ask for a holding deposit of up to $100 when an offer is made, and it is returned if the offer is not accepted. The balance of the deposit is paid once the cooling-off period has expired and is held in trust until settlement. At auction the deposit is usually a minimum of 10% of the price bid, and auction conditions are generally a 10% deposit and 30-day settlement.

The usual settlement period is 30 days, though it can run to about three months to allow for other events. SA.GOV.AU gives four to twelve weeks, negotiated between buyer and vendor. At settlement both parties are represented by a conveyancer, and since 2016 registered practitioners have settled and lodged electronically under the national framework. This research did not identify a prescribed or industry-standard contract of sale; the Law Handbook's chapter on special conditions covers the terms buyers add.

Before you sign

1. Give the contract and the Form 1 to a conveyancer or solicitor before signing, and note the day the Form 1 is served.
2. Count the two clear business days on a calendar, skipping weekends, public holidays and the day of service.
3. Write finance and building and pest inspection conditions into the contract, with dates that fit inside the settlement period.
4. Check the title details, mortgages, easements and zoning in the Form 1 against what the agent has said.
5. Confirm the deposit at signing is no more than the token sum, and that the balance falls due only after cooling-off ends.
6. List the inclusions and exclusions, fixtures and chattels, in the contract itself.
7. Set the settlement date with the lender's timetable in mind.
8. Sign a legal practitioner's certificate waiving cooling-off only after deciding to give the right up.