Cooling-off period in South Australia: how the 2 clear business days work

When you buy residential property in South Australia by private treaty, you get a cooling-off period of 2 clear business days in which you can walk away for a small cost. Unlike Victoria or New South Wales, where the clock always starts on the day you sign, South Australia's cooling-off clock can start on two different days depending on when the seller's Form 1 vendor statement is served, so knowing which situation you are in matters more here than almost anywhere else in the country.

What the cooling-off period is

The cooling-off period is a statutory right, set out in section 5 of the Land and Business (Sale and Conveyancing) Act 1994 (SA), that lets a residential property buyer rescind a contract shortly after committing, for a small cost, and recover the rest of any money paid. It exists so that a buyer who signed quickly is not locked in with no way out.

It is not a licence to renegotiate the price, and it is not a substitute for doing your checks before you sign. It is a narrow, time-limited exit, and in South Australia its exact length depends on a detail many buyers overlook: when the Form 1 was served.

The 2 clear business days, explained

The period is 2 clear business days. "Clear" business days means you do not count the day the clock starts, and you do not count weekends or public holidays. So if the clock starts on a Monday with no public holidays that week, your two clear business days are Tuesday and Wednesday, and your right to cool off runs to the end of that Wednesday, or until settlement, whichever comes first.

Which clock applies to you

South Australian law does not simply start the clock when you sign. It depends on when the seller serves you the Form 1 vendor statement (section 7), and there are two situations:

• Form 1 served before you sign: your cooling-off period ends at the close of the second clear business day after the day the contract was made.
• Form 1 served after you sign (common in practice, where the contract is signed "subject to" the Form 1 following shortly after): your cooling-off period does not start until the Form 1 is actually served, and then runs for the same two clear business days from that date.

Either way, the period also ends at the time of settlement if that happens sooner than the two clear business days would otherwise run out. Because your exact deadline depends on which of these two situations you are in, and on the date the Form 1 was actually served, ask your conveyancer to confirm your specific deadline in writing rather than counting it yourself. The Form 1's role in all of this, and what it must disclose, is set out in full in the Form 1 vendor statement South Australia guide.

The cost if you withdraw

If you use the cooling-off period to pull out, you are entitled to a full refund of any money you paid, except that the vendor may keep a deposit of up to $100. Section 5(4) of the Act is explicit: on rescission the purchaser is entitled to the return of money paid, but the vendor may retain a deposit "if the deposit does not exceed $100." There is no percentage-of-price penalty in South Australia, unlike Victoria's 0.2% or NSW's 0.25% -- the cap is a flat $100 regardless of the purchase price.

How to exercise the cooling-off period

To cool off, you give the vendor written notice, before the cooling-off period ends, that you do not intend to be bound by the contract. Under section 5(2) of the Act, that notice can be given:

• to the vendor personally;
• by registered post to the vendor's last known address;
• by fax or email, if the vendor has provided a fax number or email address for that purpose; or
• to the vendor's agent, left with someone apparently responsible at the agent's address, or by registered post to the agent.

If it is ever disputed whether notice was given in time, the burden of proving it falls on the buyer, so keep a copy and proof of when and how it was sent. Your conveyancer or lawyer normally prepares and serves this notice for you.

When there is no cooling-off period

The cooling-off period does not apply in the following situations, set out in section 5(7) of the Act. If any of these describes your purchase, you are committed as soon as the contract is signed, with no statutory window to withdraw:

• Auction purchases: the sale is by auction, or a successful bidder at a failed auction enters the contract on the same day.
• Independent legal advice already obtained: before signing, you received independent advice from a legal practitioner who signed the prescribed certificate confirming that advice was given.
• Tender and option sales, on strict timing: where the contract follows a tender or the exercise of an option, and specific minimum gaps (5 clear business days from the tender closing or option grant, and 2 clear business days from when the Form 1 was served) have passed.
• Corporate buyer of non-residential land: the purchaser is a body corporate buying land other than residential land.

A defective Form 1 and your rescission right

Because the cooling-off clock is tied to the Form 1, an inaccurate or incomplete Form 1 has a knock-on effect beyond simple non-disclosure: it is treated as defective and does not start the cooling-off clock running at all. If the vendor corrects it, the two clear business days start fresh from the date of the correction. Separately, if a valid Form 1 is never served, or the one served is inaccurate, the purchaser can rescind the contract at any time up to settlement, well beyond the ordinary two-day window, and the vendor commits an offence carrying a fine of up to $10,000. The full detail is in the Form 1 vendor statement South Australia guide.

South Australia versus Victoria and New South Wales

Cooling-off rules are set state by state, and South Australia's are the shortest of the three largest jurisdictions, with a structure that is also genuinely different, not just shorter:

• South Australia: 2 clear business days, clock start depends on Form 1 timing, penalty capped at a flat $100 regardless of price.
• Victoria: 3 clear business days, clock always starts when you sign, penalty of $100 or 0.2% of the price, whichever is greater.
• New South Wales: 5 business days, clock starts at exchange, penalty of 0.25% of the price.

All three remove the cooling-off period entirely for auction purchases. If you are comparing states, see our Victorian cooling-off period guide, the NSW cooling-off period guide, and the cooling-off period by state comparison, which sets out every state and territory side by side.

Practical tips for South Australian buyers

• Find out exactly when your Form 1 was, or will be, served. That single date controls your deadline, not the date you signed.
• Do your checks early. Two clear business days is not long enough to arrange finance and a full contract and Form 1 review from scratch after signing.
• Remember auctions carry no cooling-off period. If you might bid, complete all due diligence, including reviewing the Form 1 on display, beforehand.
• Serve your withdrawal notice properly, and keep proof. The onus is on you to show notice was given in time if it is ever disputed.

Conveyancing Explained provides general information about property transactions in Australia. It is not legal advice and does not create a client relationship. For advice on your situation, engage a licensed conveyancer, settlement agent, or property solicitor in your state or territory.