Cooling Off Period in ACT
Know the ins and outs of the cooling off period in ACT’s real estate landscape.
What Is a Cooling Off Period for Real Estate in ACT?
Shopping for a new house in the Australian Capital Territory (ACT) introduces you to the concept of a cooling-off period. But what exactly does it entail? Think of it as a safety net, allowing potential buyers to reconsider and reflect upon their decision to purchase a property. Let’s say, for instance, you found your dream house in Canberra, the heart of the ACT. Captivated by its design and location, you hastily signed the contract. The cooling off period is there to ensure you have time to pause, reassess and confirm you’re making the right choice, free from the potential binds of buyer’s remorse.
How Long Is the Cooling Off Period in ACT?
Like NSW and QLD, the ACT provides buyers with a 5-business-day window as their cooling off period. Picture this: You’ve inked a deal on a charming suburban home on Monday. The subsequent days until the end of Friday become your period to double-check your decision. If, within this window, you discern that maybe this isn’t the dream home you envisioned, you have the right to back out. However, it’s not entirely without repercussions. Backing out necessitates a written notice, accompanied by a minor setback—a fee amounting to 0.25% of the purchase price.
More Things You Should Know
What are the exceptions?
There’s always fine print, isn’t there? In ACT’s real estate arena, certain conditions might exclude you from this cooling-off benefit. Let’s illustrate with an example. If you participate in an adrenaline-pumping property auction in Canberra and emerge as the winning bidder, the cooling off period doesn’t apply.
When does the period start?
In the ACT, the clock starts ticking from the day after both parties sign the contract. For instance, if you and the seller finalised and signed the contract on a Wednesday, your opportunity to rethink your decision will span from Thursday to the following Tuesday, excluding weekends.
What happens after the period?
Once this buffer period concludes, the contract becomes irrevocable, holding both parties to their commitments. Consider it a point of no return. If, for example, two weeks after signing the contract, you discover another property you prefer, it would be too late to backtrack without potential legal ramifications or a hefty loss on your deposit.
Can you still get your deposit back if you terminate a contract during the cooling off period?
In a hypothetical scenario, let’s say you’ve put down a deposit on a beautiful townhouse in the suburbs of Canberra. Then, a few days later, you stumble upon another property that fits your requirements better. If you’re within the cooling-off period, the good news is you can retrieve your deposit. However, there’s a small catch. You’ll need to compensate the seller with a penalty fee of 0.25% of the home’s purchase price.
Why would you withdraw from buying a property?
There could be different motivations for retracting a property purchase. It could be as simple as a buyer’s change of heart or as complex as discovering undisclosed defects during a property inspection. Imagine touring the property again and spotting foundational issues or mould patches that went unnoticed initially. Alternatively, it could be external factors, such as unforeseen financial setbacks or unfavourable loan terms from the bank. The cooling off period in the ACT provides a contingency plan for such unpredictable hitches.
In specific scenarios, buyers might feel confident enough to bypass this cooling-off safety net. How is it done? It necessitates the involvement of legal professionals. Only after obtaining a certificate from a solicitor, which affirms the buyer is well-versed with the implications of waiving this right, can one officially opt out of the cooling off period in the ACT.
HOW LONG IS THE COOLING OFF PERIOD IN ACT?
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Steps to Cancel During the Cooling Off Period
Sometimes, second thoughts aren’t just passing clouds; they demand action. If you’re having reservations and are leaning towards cancelling a contract of sale during this period, follow these steps:
1. Consult a Solicitor
Before any hasty decisions, it's prudent to liaise with your solicitor. They'll provide clarity on your position and potential repercussions.
2. Submit a Written Notice
If you're resolute about retracting, formally notify the seller's agent in writing. Be sure it's done before the cooling-off period ends.
3. Be Aware of Penalties
Be prepared for a minor financial hit. As mentioned, cancelling during the cooling off period in the Australian Capital Territory might mean parting with 0.25% of the purchase price. It's a small price for a change of heart.
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