What is “cooling off”?
Section 31 of the Sale of Land Act (VIC)1962 enables a Purchaser of Victorian real estate to exercise their cooling off rights to terminate a Contract of Sale within three (3) clear business days of the Purchaser signing the Contract. If a Purchaser terminates the Contract, deposit monies are refunded to the Purchaser, except for the sum of 0.2% of the purchase price of the Contract OR $100.00, whichever is greater.
Exceptions to the cooling off rule.
A Purchaser’s cooling off rights only applies to private sale of residential properties. A purchaser has no rights to cooling off where they purchased the property at an auction. Further, a Purchaser’s cooling off rights DO NOT apply in the following circumstances:

• if the Purchaser is a corporation (company);
• if the Purchaser is an Estate Agent;
• if the Contract was signed within three (3) business days before or after an auction;
• if the property is used primarily for industrial or commercial purposes;
• if the Vendor and the Purchaser have entered into the Contract of Sale on prior occasions on similar terms; or
• if the property is more than twenty (20) hectares and is used primarily for farming.

Service
Where a Purchaser wishes to exercise their cooling off rights, they must serve a notice either to the Vendor directly, or to the Vendor’s agent, being the Vendor’s solicitor/conveyancer. Service cannot be made on the vendor’s Real Estate Agent.

Failure to exercise “Cooling off” rights effectively could see a purchaser being locked into a binding Contract against their wishes or loss of their 10% deposit if they breach the contract by withdrawing from the contract.