Every individual decides to purchase a property after analysing multiple factors. But, many times, the property has some issues. Some of the common ones are not having clarity regarding the ownership & title, defects in infrastructure, etc. So, the buyers have to cancel the property purchase.
However, the process to cancel a property purchase is very complex and lengthy. Besides, depending on your location, the rules and regulations for cancellation are different. Therefore, it is better to keep a legal professional like a property lawyer on your side to deal with such a situation effectively and efficiently.
We have mentioned some points below that will make you familiar with the fact that up to which stage it is possible to cancel the property purchase. In addition, we have explained the legal formalities according to different locations in Australia and the role of property lawyers in the process.
Up to Which Stage The Property Purchase Cancellation is Possible?
Now, it totally depends on how you bought the property in the first place. And, in some cases, it is challenging to cancel the property purchase. Suppose you have bought the property through the auction mode. In such a scenario, you can only cancel the purchase before making the final bid. But, if you made the final bid and it also gets accepted, you have to purchase the property, no matter what.
On the other hand, if you bought the estate through a private sale, the rules and process will be entirely different. Property contracts are of two types: Conditional and Unconditional. In case you signed any one of them, there will be a separate process to facilitate the cancellation. We have explained both of them in detail, let’s have a look.
Unconditional Contract
As the name suggests, this type of contract doesn’t have any conditions or clauses that allow you to cancel the purchase. But, there is a catch! You can still back off from an unconditional contract by serving the cooling-off period. This time duration is specially meant for circumstances where the buyer or dealer no longer wants to buy or sell the property.
So, if you lie in the cooling-off period, an expert like a property lawyer can help you to get out of the contract. However, the respective rules, regulations, and processes will be different depending on the territory or the state. This type of contract doesn’t demand the purchasing party to pay higher amounts to back off from the contract, which is a good thing for the buyers.
Cooling-Off Period and Rules of Different Australian States & Territories
As we have mentioned before, the rules and regulations for the cooling-off period are different for different Australian regions. Let’s have a brief overview of the same.
New South Wales, Queensland & Australian Capital Territory
For cancelling a property purchase in these regions, you need to bear 0.25% of the total property price as a penalty. Afterwards, you can take your name back from the contract. Besides, you must complete the whole process within 5 business days for successful cancellation.
Victoria
In Victoria, you need to either pay 0.2% of the property’s total price or deposit 100$. The selection between the two is made on the basis of which amount is higher. In addition, you should complete the process within 3 business days of the purchase.
South Australia
If your purchased property is located in South Australia, the cooling-off duration will be 2 business days. In addition, you have to pay 100$ as cancellation charges.
Western Australia
Western Australia is one of the Australian regions that doesn’t require you to serve a cooling-off period. However, if the seller and buyer have decided on a cooling-off period previously, it can be served.
Northern Territory
For this region, there is no need to pay any charges to cancel the property purchase. However, you must complete all the legal formalities within 4 business days.
Tasmania
If you want to cancel a property purchase in Tasmania, you don’t need to serve any cooling-off period.
Conditional Contract
In a conditional contract, the property transaction will proceed only if certain conditions are met. These conditions are decided and agreed on in advance by both buying and selling parties. So, you can add several clauses to the contract from your side. For example, the seller must get the property cleaned or pay for installing electricity fittings throughout the home or office.
Now, if the seller refuses to fulfil any of these conditions at any stage of the deal, you can back off from purchasing the property. Besides, some common clauses are present in almost every conditional contract. If you hire a property lawyer, the respective professional will assist you with these clauses in detail. Let’s check out some of them.
Building Inspection
After you make your offer for the respective property and the seller agrees on the amount, this clause comes into play. It gives you the right to inspect the property and ensure that all the required safety practices are effectively followed. This way, you get the assurance that the property is safe to reside in. If you are not satisfied, you can back off from the deal.
Pest Inspection
This condition allows the buying property to claim their right of getting a pest-free property. So, if any insects like termites, cockroaches, etc., are found during the property inspection, you can cancel the property purchase. It helps to maintain good hygiene and cleanliness at the respective property.
Finance
This clause comes into play if you are planning to purchase a property on loan. If for some reason, your home loan is not approved, you can show the documentary proof for the same to the seller, and back off from the contract. Besides, you get your total deposit back without any issues.
Conclusion
After going through the above points, you should have become familiar with the rules and processes related to the cancellation of a property purchase. In addition, the role of a legal expert such as a conveyancer or property lawyer becomes evident in avoiding any mistakes. All in all, cancelling a property purchase requires you to pay some penalty in some cases, but it is bearable given that you don’t have to pay the total property amount.
About The Author
Jim Pullman
Jim Pulman has extensive knowledge and experience in Home Building, Construction, and Design. He writes articles in his free time and partners with content creators to share his expertise with the online community. He is also passionate about automobiles.
