Under the Land and Business (Sale and Conveyancing) Act 1994, a buyer of residential property in South Australia has the right to rescind the contract within two clear business days of signing. The clock starts from the day the buyer (the last party to sign) signs the contract, not the day the vendor signs. Weekends and public holidays are excluded from the count.
To exercise your right to cool off, you must notify the agent or vendor in writing within the cooling off period. A verbal cancellation is not sufficient. Your conveyancer can prepare the required notice and ensure it is delivered correctly. Acting without proper written notice could mean the contract remains binding.
Cooling off is not free. Under SA law, if you withdraw during the cooling off period you must pay the vendor the greater of $100 or 0.2% of the purchase price. On a $700,000 home, 0.2% equals $1,400. This amount is forfeited from any deposit you have paid, or is payable to the vendor if you have not yet paid a deposit.
While $1,400 is a real cost, it is modest compared to the financial damage of proceeding with a purchase that later proves problematic. If you have genuine doubts about a property in the days after signing - whether about the building inspection, the neighbourhood, or your finance - the cooling off period exists precisely for this situation.
Properties sold at auction in South Australia have no cooling off period. Once the hammer falls and you sign the contract, you are unconditionally bound. This is why building and pest inspections, title searches, and finance pre-approval are strongly recommended before bidding at auction - not after.
The cooling off period can also be waived by the buyer before signing the contract. This is sometimes requested in competitive private treaty situations where the vendor wants certainty. Waiving cooling off removes your ability to withdraw without significant penalty, so it should only be done when you are fully committed and have completed all necessary due diligence.
A cooling off period and a finance clause are separate protections that serve different purposes. Cooling off is a statutory right that allows you to withdraw for any reason within two business days - it does not require you to state a reason, and it applies regardless of finance.
A finance clause (sometimes called subject to finance) is a contractual condition negotiated into the contract that allows you to withdraw without penalty if your finance is not formally approved by a specified date. Finance clauses typically operate over a longer period - often 14 to 21 days - and provide ongoing protection after the cooling off period has expired. Both protections are valuable, and for most buyers you want a properly worded finance clause in your contract in addition to the statutory cooling off right.
Jason and Steve are Adelaide mortgage brokers who give honest, practical advice at no cost to you. No obligation.
The information on this page is general in nature and does not constitute financial or legal advice. Given Finance Pty Ltd (t/a Lendology) ACN 624 144 501 is authorised under LMG Broker Services Pty Ltd ACL 517192. Please consult a licensed conveyancer or solicitor for advice specific to your property transaction.