Cooling-Off Waiver in Victoria for First Home Buyers

We get asked this almost every week by first home buyers in Melbourne who have just signed a contract and been told by an agent that cooling off ‘doesn’t apply’, or that they have already waived it.

The short answer: In Victoria, a contract clause cannot make a buyer waive cooling-off rights under section 31 of the Sale of Land Act 1962 (Vic). Section 31(8) says a clause that tries to remove or modify the right is void, but cooling off still does not apply in the excluded situations listed in section 31(5), including public auctions, contracts signed within three clear business days before or after a public auction, repeat contracts on substantially the same terms, and purchases by companies.

For a first home buyer, the difference is huge. The cooling-off period in Victoria is meant to give you a short safety window after signing, not a free pass from every signed contract. If one of the exclusions applies, you may be locked in from the moment you sign.

Can you waive cooling-off rights in Victoria?

No, not by signing a clause in the contract. If your Victorian contract includes words such as ‘the purchaser waives cooling off’, that clause does not remove a valid section 31 right.

This is where first home buyers can get mixed messages. An agent might say the vendor will only accept the offer if it is ‘no cooling off’. A special condition might say you agree not to rely on section 31. Those words can look serious, mainly when you are trying to secure a townhouse in Preston or an apartment near the CBD after a packed Saturday inspection.

The key point is simple: section 31(8) of the Sale of Land Act 1962 (Vic) makes a clause that tries to exclude or modify the cooling-off right void. The clause may still sit in the paperwork, but it does not do the legal work the vendor hopes it will do.

The danger is not that the clause works. The danger is that it scares a buyer into doing nothing until the deadline has passed.

When does the three clear business day cooling-off period apply?

Cooling off usually applies to private sales of residential property in Victoria, as long as no section 31(5) exclusion applies. The buyer must give written notice within three clear business days after signing the contract.

‘Clear business days’ means you do not count the day you sign. Weekends and Victorian public holidays are not counted either. If you sign on a Monday, the three clear business days are usually Tuesday, Wednesday and Thursday. If you sign on a Friday before a long weekend, the clock can stretch further than you might expect.

Cooling off is useful when something changes fast. Your bank valuation might come back lower than expected, your building inspection might find damp or old stumping issues, or you might reread the owners corporation rules and realise the apartment is not right for you.

If you validly cool off, the vendor may keep $100 or 0.2 per cent of the purchase price, whichever is greater. On a $750,000 first home, that is $1,500. On a $900,000 townhouse, it is $1,800. The rest of the deposit should come back.

When does cooling off not apply in Victoria?

Cooling off does not apply if your contract falls into one of the exclusions in section 31(5). In those situations, there is no cooling-off right to use.

The main exclusions are:

the land is used mainly for industrial or commercial purposes
the land is more than 20 hectares and used mainly for farming
the sale is by publicly advertised auction
the land is sold within three clear business days before or after a publicly advertised auction
the same vendor and buyer previously signed a contract for the same land in substantially the same terms
the purchaser is an estate agent
the purchaser is a body corporate, such as a Pty Ltd company

For first home buyers in Melbourne, the auction timing rule and company purchaser rule are the ones that cause the most stress.

How does the auction timing trap catch Melbourne buyers?

If you sign within three clear business days before or after a publicly advertised auction, cooling off does not apply. That can catch buyers who think they are avoiding the pressure of auction day by signing a private contract just before or just after the auction.

Picture this. You inspect a unit in Thornbury on Saturday, the auction is advertised for the next weekend, and the agent calls on Thursday to say the vendor will accept your offer if you sign today. That may feel like a calm private sale, but it sits inside the auction blackout window.

The same problem can happen after auction. The property passes in, the vendor keeps negotiating, and you sign on the following Tuesday. If that is within three clear business days after the auction, cooling off is still excluded.

In our practice, we’ve seen this most often with inner north and inner west properties where buyers are trying to move quickly before another bidder appears. The buyer thinks they are getting ahead of the competition. In truth, they may be giving up their statutory cooling-off safety net without meaning to.

What should I do if a contract says ‘buyer waives cooling off’?

Do not assume the clause is valid. Send the contract to your conveyancer straight away, especially if the clause appears in the special conditions in a contract of sale.

A waiver clause is often a red flag, not a final answer. Your conveyancer should check two separate things:

Does section 31 cooling off apply to this contract at all?
If it applies, has the deadline for giving written notice passed?

That second point matters. A void clause does not extend time. If the cooling-off deadline is 5 pm today, a buyer should not spend the afternoon arguing with the agent about wording. The practical step is to serve the notice properly and keep proof.

Victoria is different from some other states. Certificates and forms used elsewhere do not create a Victorian cooling-off waiver system. For a Victorian first home buyer, the real question is not ‘did I sign a waiver?’ It is ‘is my contract excluded under section 31(5), and am I still within time?’

How do you exercise cooling off in Victoria?

You exercise cooling off by giving written notice within three clear business days after signing. The notice must go to the vendor or a person authorised to receive it, which may include the vendor’s legal representative or the estate agent where the contract authorises that method.

This is where procedure matters. The cooling-off period when buying a house is short, so you need proof that the notice was sent in time and sent to the right place.

A good cooling-off process usually includes:

checking the contract to identify the vendor, vendor’s representative and selling agent
preparing a clear written notice that refers to section 31
serving the notice before the deadline
sending it by more than one method where sensible, such as email and registered post
keeping copies, delivery records and email timestamps

The Court of Appeal decision in Lo v Russell is a useful reminder that service can turn on the wording of the contract and the authority given to the agent. Do not rely on a quick text message or a casual email to the sales agent unless your conveyancer has checked the service position.

Does buying through a company remove cooling off?

Yes. If the purchaser is a body corporate, cooling off does not apply under section 31(5). A Pty Ltd company is a body corporate, even if it is small, new, or controlled by you.

This can surprise first home buyers who have been told by a broker, accountant or family member that a company structure may help later. It may suit some investment plans, but it is a poor fit for many first home buyer purchases.

There is another sting. Victorian first home buyer duty benefits generally require all purchasers to be natural persons, not companies or trusts. If you are buying your first home to live in, putting the contract in a company name can affect both cooling-off rights and duty benefits.

Before you sign, make sure the purchaser name is right. Fixing the structure after signing can be messy, and nominations can raise their own duty issues.

What if this is the second contract for the same property?

If the same buyer and vendor previously entered into a contract for the same land on substantially the same terms, cooling off does not apply to the later contract. This rule is easy to miss because the second contract can feel like a fresh start.

It might happen if finance fell through, a settlement date had to be reworked, or the parties renegotiated after an earlier contract ended. A small price change or new settlement date may not be enough to make the later contract truly different.

If you have already signed once for the same property, treat any second contract as high risk until your conveyancer checks it. Do not assume the three clear business day window starts again.

What should a first home buyer check before signing?

Before you sign, ask your conveyancer to check the cooling-off position, the buyer name, the auction history and the contract conditions. Those four points can change how much risk you are taking.

A practical pre-signing review should cover:

whether the property is private sale or auction related
whether the signing date falls within three clear business days before or after an advertised auction
whether the buyer is a natural person, company or trust
whether there has been an earlier contract for the same property
whether special conditions contain misleading waiver wording
whether finance, building, pest or owners corporation conditions are needed
whether the Section 32 vendor statement raises title, planning, zoning, easement or owners corporation concerns

A cooling-off right is not a replacement for due diligence. It is a short safety window. The better approach is to know your rights before signing, rather than trying to repair the position after an agent has marked the property as sold.

Frequently Asked Questions

Can the agent force me to waive my cooling-off rights in Victoria?

No. An agent cannot make a valid Victorian cooling-off right disappear by asking you to sign a waiver clause. Section 31(8) of the Sale of Land Act 1962 (Vic) makes clauses that try to exclude or modify the cooling-off right void, unless the contract is already outside cooling off under section 31(5).

Does signing a statutory declaration waive my cooling-off rights in Victoria?

No. Victoria does not have a general statutory declaration process that lets a first home buyer waive cooling off. If cooling off applies under section 31, a document saying you waive it should not remove that right.

What is the cool-off fee in Victoria?

There is no separate waiver fee. If you validly cool off, the vendor may keep $100 or 0.2 per cent of the purchase price, whichever is greater. On a $700,000 first home, that amount is $1,400, and the balance of the deposit should be refunded.

If I sign a contract two days before auction, do I still get cooling off?

No. Cooling off does not apply if you sign within three clear business days before a publicly advertised auction for that property. The same exclusion also applies on auction day and within three clear business days after the auction.

Does cooling off apply to off-the-plan apartments in Melbourne?

Yes, cooling off can apply to off-the-plan apartments in Melbourne if none of the section 31(5) exclusions apply. Many off-the-plan purchases are private treaty sales, not auction sales, but buyers should still check the contract, purchaser name and any earlier contract history before signing.

What happens if my cooling-off notice arrives one day late?

A late notice may be invalid, which means the contract continues. The notice must be given within three clear business days after signing, so it is safest to contact your conveyancer as soon as you decide you may want to cool off.

Can I cool off if I bought through my Pty Ltd company?

No. A Pty Ltd company is a body corporate, and section 31(5) excludes body corporate purchasers from cooling off. If you signed personally and later nominated a company, get advice quickly because the cooling-off and duty effects may depend on the contract and nomination documents.

About the Pearson Chambers Conveyancing team

Pearson Chambers Conveyancing is a Melbourne-focused conveyancing firm assisting first home buyers across Victoria with contract reviews, Section 32 checks and settlements. Our conveyancers regularly help buyers work out whether cooling off applies before they sign, or whether an urgent notice needs to be served after signing. Cooling-off issues are part of the day-to-day contract risk checks we make for Melbourne buyers.

Sources we consulted

Book a complimentary Section 32 contract review

If you are a first home buyer in Melbourne and you have been told you cannot cool off, send us the contract before the deadline passes. Pearson Chambers Conveyancing can check whether cooling off applies, review your Section 32 and contract, and explain your next step in plain English.

Email contact@pearsonchambers.com.au.

General information only, current as at the date of publication. Victorian conveyancing rules and legislation change frequently. Please contact the Pearson Chambers Conveyancing team for advice on your specific contract.