22 October 2021
Conveyancing - Cooling off period and rescission
My client entered into a contract for the purchase of property that was still under construction when contracts were exchanged. The plan was already registered, but neither the title search nor building occupation certificate was annexed to the contract.
Settlement is subject to the vendor providing the purchaser with a copy of the building occupation certificate.
In addition, the vendor's agent advised my client that the cooling off is 10 business days. Is this correct?
As there is no title search annexed to the contract, do we have the right to rescind the contract?
Thank you for the question.
The cooling off period for off the plan contracts is 10 business days and in any other case 5 business days: s 66S of the Conveyancing Act 1919. Note that if the property was exchanged after the lot was created – and is therefore not off the plan – the standard 5 business day cooling off period applies. See the definition of off the plan in s 66ZL of the Act. Note, however, that the parties may agree to any length of cooling off period.
The following are extracts from the By Lawyers Purchase of Real Property (NSW) commentary:
A purchaser may rescind a contract anytime within 14 days after exchange where the vendor has failed to attach the prescribed documents.
... The right of rescission can be lost if the purchaser does not act promptly to exercise the right: Zucker v Straightlace P/L (1987) 11 NSWLR 87.
The documents required to be disclosed are listed in Schedule 1 and, for off the plan contracts, r 4A of the Conveyancing (Sale of Land) Regulation 2017. A title search is included at item 3 of Schedule 1.
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