Pursuant to section 66S of the Conveyancing Act 1919 (NSW), there is to be a cooling off period for every contract for the sale of residential property. There are exceptions for properties sold at auction and commercial premises. The cooling off period commences on the day the contract is exchanged and will end at 5 pm on either the fifth business day or tenth business day after exchange.
Section 66W Certificate (Waiving Cooling Off Rights)
At times, the vendor (seller) may require the purchaser to sign a section 66W certificate, which waives the purchaser’s right to a cooling off period. During the cooling off period, you are also entitled to exercise your rights to “cool off” or to withdraw from the contract under section 66U. If you, the purchaser, wish to withdraw from the contract during the cooling off period, you will need to instruct your conveyancer or solicitor in writing, and they will then issue a section 66U Notice to Cool Off certificate to the vendor (seller). If you withdraw during the cooling off period, you will lose 0.25% of the purchase price (the holding deposit), and be refunded any monies paid to the vendor and/or their agent.
Why a Cooling Off Period Matters?
A cooling off period protects the purchaser because it provides you time to conduct inspections, obtain legal advice in relation to the contract, negotiate with the vendor in relation to any terms of the contract, obtain unconditional loan approval and reassess the agreement and property after signing the contract.
After the Cooling Off Period Expires
Once the cooling off period expires, the contract is unconditional and binding, which means that there are penalties if you terminate or default on the contract.
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For assistance with conveyancing matters in NSW, please contact our conveyancing team on 1300 557 819.
