The requirements under Section 31 of the Sale of Land Act for the purchaser to be able to terminate the contract are :
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The fundamental requirements for the contract of sale of real estate is that it must be in writing and signed by all the parties involved. Once this requirement is met the Contract is binding all parties. To protect consumers legislation has created certain statutory rights, such as the cooling off period Victoria, for the purchaser to bring the contract to an end.
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The purchaser who exercises the right to cool off is liable to pay a penalty of $100 or 0.2% of the purchase price to the vendor. $100 is 0.2% of $50,000, so for all purchases over $50,000 the penalty will be 0.2%.
The purchaser is entitled to a refund of the deposit monies less the above penalty. This penalty is payable even if an initial deposit was not paid.
If the contract is signed on Saturday, the first day for calculating the period is Monday. The purchaser has until the end of Wednesday to utilise the cooling off period Victoria.
There is no certainty as to whether it is until the end of the business day (i.e. 5pm) on the last day or until the end of the day (i.e. midnight). The conservative view would be to regard the right as exercisable up until midnight. Treating midnight as the end of the day.
The signing of the contract by the purchaser is the triggering factor for commencement of time, even if the vendor is yet to sign and the contract is not binding. Once the purchaser signs, the 3 day period commences, beginning on the next business day.
If the vendor has not signed the contract after 3 days, the purchaser would have lost the right to cool off but may still withdraw the offer to purchase. The purchaser is not relying on the cooling off period Victoria but on the contractual principle that no contract has come into existence. In this situation the purchaser is entitled to a full refund of the deposit without any penalty.
Section 31(3) requires the purchaser to give written notice and deliver it to the vendor or his agent. There is no particular form for the notice and it can just be a simple letter. Delivery can be effected by leaving the written notice at the address for service of the vendor as specified in the contract.
Section 31(6) & (8) prohibits contracting out of the cooling off period Victoria. Any condition in the contract that seeks to take away the right, with consent or otherwise, is void. The contract must include a notice setting out the cooling off rights and a purchaser may rescind a contract that fails to include this notice.