Cooling-off and contracts in Victoria

Three clear business days, on a private sale only. Victoria's cooling-off period runs from the day the buyer signs, and there is none at auction. The contract form matters here because the seller's disclosure, the Section 32 vendor statement, is a separate legal document under the Sale of Land Act 1962. The buyer's remedies turn on whether it is accurate and complete.

The cooling-off period

A cooling-off period of three clear business days applies to a private treaty sale. It begins on the date the buyer signs the contract. To use it, the buyer gives written notice to the seller or the seller's agent.

The buyer is entitled to a full refund of the money paid, less $100 or 0.2% of the purchase price, whichever is the greater. The research found no separate cooling-off rule for off-the-plan contracts; the off-the-plan duty concessions are on the stamp duty page.

When there is no cooling-off

There is no cooling-off period in a sale at auction. It reaches either side of the auction: a property bought within three clear business days before or after a public auction has no cooling-off. Cooling-off rights also do not apply where the property is used mainly for industrial or commercial purposes. Nor do they apply to farmland of more than 20 hectares, or where the buyer has previously signed a contract for the same property.

Whether the period can be waived or shortened was not confirmed from this environment, and nor were the remaining exclusions in section 31 of the Sale of Land Act 1962. Section 31 is the place to check.

What the seller must give you

Before the buyer signs, the seller gives a vendor statement, called the Section 32 after the section of the Sale of Land Act 1962 that prescribes it. It contains information about the property's title, including mortgages, covenants, easements, zoning and outgoings such as rates. It says nothing about the condition of the buildings, whether they comply with building regulations, or whether the measurements on the title are accurate. In Consumer Affairs Victoria's words, it is the buyer's responsibility to find out about anything the statement does not cover.

The statement is a legal document and has to be factually accurate and complete. If it contains false, incorrect or insufficient information, the buyer may be able to withdraw from the sale or take legal action. The exact line items the Act prescribes were not returned from this environment. The research lists building permits in the last seven years, owner-builder warranty insurance, connected services, notices and orders, and bushfire-prone status as items to confirm in sections 32 to 32I.

Consumer Affairs Victoria also publishes a due diligence checklist for buyers; its contents were not returned from this environment. Read the Section 32 with a conveyancer or lawyer, asking what on the title limits use, what the outgoings are, and what the statement is silent on.

The contract, the deposit and settlement

The deposit is negotiable with the vendor, up to 10% of the purchase price. It is generally paid to the seller's agent, either when the buyer makes the offer or by the date stated in the contract of sale. It is held in a trust account by the seller's agent, conveyancer or legal practitioner until settlement. Consumer Affairs Victoria publishes a sample contract of sale of real estate.

The settlement date is stated in the contract. Settlement is when the checks are done, the title and transfer documents change hands and the balance of the price is paid. It has to be conducted between 10 am and 4 pm unless the parties agree otherwise. The usual settlement periods (30, 60 or 90 days) were not confirmed from this environment. Victoria settles electronically: Land Use Victoria moved to digital-only lodgement by 1 August 2019, and settlement runs through an electronic lodgement network such as PEXA. The buying process page has the sequence.

Before you sign

1. Give the contract and the Section 32 to a conveyancer or lawyer before signing anything, and ask what the statement is silent on.
2. Check that any finance condition and any inspection condition are written into the contract, with their dates, before it is signed.
3. Diarise the end of the three clear business days from the day of signing.
4. Confirm the deposit amount, who holds it and the date it is due.
5. Read the title matters in the Section 32 (mortgages, covenants, easements, zoning) and the outgoings.
6. Arrange a building and pest inspection; the vendor statement says nothing about the condition of the buildings.
7. Check the settlement date and that the conveyancing side is set up for electronic settlement.
8. Check that the inclusions and exclusions (fixtures, appliances, window furnishings) are written into the contract itself.