How Cool Is "Cooling Off" In Real Estate Contracts?
by Tim O’Dwyer M.A., LL.B Queensland Solicitor & Consumer Advocate watchdog@argonautlegal.com.au
When is a contract not a contract?Time was, when cooling-off periods applied only to door-to-door sales contracts. Nowadays in most parts of Australia – Queensland included – residential property buyers may validly terminate “signed-sealed-and-delivered” contracts during the cooling-off periods allowed by real estate laws. Governments and their Fair Trading offices say this is an excellent consumer protection mechanism for buyers, but fail to appreciate that Mum-and-Dad sellers can also be protection-worthy real estate consumers.
Answer: When the law lets a buyer cool-off and cancel the contract.
Why no seller’s cooling-off right? The official thinking may be that buyers are more vulnerable to seller or agent pressure. But if buyers alone need an escape hatch after contracting under pressure, why no cooling-off for auction buyers? When real estate auctions are promoted on the basis that they create a sense of urgency and a competitive environment, surely residential auction buyers (if not also auction sellers) most need protective cooling-off rights – especially when the fall of the hammer irrevocably commits both parties to a “cash unconditional” contract. How fair is a buyer’s cooling-off right when its exercise can inconvenience not only innocent sellers but also everyone else involved in a sale – agents, solicitors, insurers, finance brokers, building and pest inspectors, valuers, sellers’ mortgagees and buyers’ financiers?
To my mind, cooling-off is a poorly-conceived, after-the-event approach to consumer protection. A better way to protect buyers and sellers alike is to keep agents out of the contract-making process. Only those legally qualified should be legally allowed to prepare legally binding contracts.
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