Thursday, 27 October 2011

What is the Cooling Off Period?



What is the Cooling Off Period?

A Purchaser of residential property in New South Wales has a five (5) business day Cooling Off Period after exchange of the Contract.  During this period, the Purchaser has the option to get out of the Contract as long as they give to you written notice of their intention to do so.   The Cooling Off Period starts as soon as the Contracts have been exchanged and ends at 5.00p.m. on the fifth business day.

If a Purchaser exercises their rights under the Cooling Off Period and withdraws from the Contract, they will have to pay to you 0.25% of the purchase price which is $250.00 for every $100,000.00.

You can ask the Purchaser to waive the Cooling Off Period and they can only do so by giving you, through their Solicitor, a Certificate under Section 66W of the Conveyancing Act 1919.  The Certificate needs to be signed by the Purchaser’s Solicitor.

A Cooling Off Period does not apply if the Purchaser has bought your property at Auction or exchanged Contracts on the same day as the Auction after it was passed in.

The deposit is usually held by the Agent pending completion of the sale and typically the Agent’s Commission is paid from that deposit, with the Agent then accounting to you directly for the balance following settlement.

From exchange to settlement
Once an exchange of Contracts has occurred, we undertake all those tasks necessary to prepare the matter for completion.  This involves:
Writing to your Bank and advising them that the property has been sold and requesting that they prepare a discharge of any Mortgage they have over the property.  We liaise with the Bank as to the final amount to be paid on settlement.
  • The Purchaser’s Solicitor will forward to us a series of questions about the property and matters relating to it known as “Requisitions on Title”.  Upon their receipt we will go through these with you with our suggested answers and then provide those responses to the Purchaser’s Solicitor.
  • Upon receipt of the stamped Transfer from the Purchaser we will arrange for it to be signed by you.
  • In the event that there is no mortgage on the property, we will need to obtain from you the original Title Deed.
  • Towards the end of the process the Purchaser’s Solicitor will calculate the amount to be paid by the Purchaser on settlement.  This calculation will include an adjustment of Council rates and water usage either to you, if you have already paid them, or if they remain unpaid, an allowance is then made to the Purchaser for your share of those rates/water.  These figures are then checked by your Solicitor and then provide to the Purchaser’s Solicitors a list of cheques that are required on settlement, totalling the amount payable by the Purchaser.  These cheques often include a cheque in favour of your Bank and how you may otherwise wish those monies to be paid.
  • Settlement is then arranged by us at a time and date both in accordance with the completion date in the Contract and when your Bank and the other parties can attend.  On the day of settlement we attend on your behalf ensuring that all relevant documentation is handed to the Purchaser and Bank cheques are received on your behalf in accordance with your instructions.
  •  Fees are paid by you on settlement, often from the proceeds of sale. 
  • On the date of settlement, the Purchaser will usually require a final inspection of the property to ensure that everything is in order.
  • You do not need to attend settlement as we,as your Solicitor attend on your behalf, however we are happy for you to accompany us to settlement, should you wish.
  • After settlement the Purchaser or their Bank will arrange for the registration of the Transfer in their favour with the Land and Property Information (formerly Land Titles Office).  The Land and Property Information will then notify the Local Council that the property has been sold, though this often does not happen until some weeks after settlement.  Sometimes you may receive a Rate Notice from the Local Council following settlement if it has issued by the Council prior to them being notified that the property has been sold.  In that event, you should just forward the Rate Notice to either the Purchaser or us and we will make the necessary arrangements to have it forwarded to the Purchaser on your behalf.


source:kingcain