In a standard REIQ Contract of Sale, the cooling-off period is a five-business day timeframe which allows the Buyer to terminate the Contract without having to provide a specific reason. The cooling-off period commences once the Buyer has received a copy of the executed Contract.
If you elect to terminate a Contract of Sale within the cooling-off period in Queensland, a few things may occur:
- Notice of Termination: To cancel the Contract within the cooling-off period, you (or your legal representative) need to provide a written notice of termination to the Seller or the Seller’s Agent. This notice must be provided within the cooling-off period and should clearly state your intention to terminate the Contract.
- Forfeiture of a Percentage of the Purchase Price: When you terminate the Contract during the cooling-off period, you may be required to forfeit a small percentage of the purchase price to the Seller. This is often referred to as a “termination penalty” or “termination fee.” The percentage is 0.25% of the purchase price or, in the event that the termination penalty exceeds the deposit already paid to the Stakeholder, the entirety of the deposit. The specific amount and terms should be outlined in the Contract.
- Return of the Balance: After deducting the termination penalty, the balance of the deposit you paid will be returned to you by the Stakeholder.
- No Further Obligations: Termination during the cooling-off period effectively nullifies the Contract, and you will have no further obligations or responsibilities regarding the property, provided that you were within your rights to terminate under the cooling off provision.
- No Legal Consequences: There are no legal consequences or obligations beyond the forfeiture of the termination penalty. This is one of the primary benefits of the cooling-off period – it gives Buyers an opportunity to back out of the Contract without the need for a specific reason.
It’s important to note that the cooling-off period is not applicable to all property transactions, such as properties purchased at auction, commercial transactions, and certain other transactions. Additionally, the cooling-off period doesn’t apply if you provide written notice of your intention to waive these rights.
Real estate transactions and regulations can vary, and the information provided is relevant to standard REIQ Contracts of Sale within Queensland. If you are considering terminating a Contract during the cooling-off period, it’s crucial to consult with your legal representative to ensure that you are within your rights to take such action. Contact The Small Business Lawyer if you require advice on your property contract.