Most buyers and sellers in Queensland know there’s a five business day “cooling-off” period when entering into a standard residential contract. During this time, the buyer can change their mind and terminate the contract – but not without a cost.
The REIQ contract typically states that if the buyer terminates during the cooling-off period, the seller may deduct 0.25% of the purchase price from the deposit. Simple, right?
Not quite.
Under the Property Occupations Act 2014 (Qld) – specifically section 168 – the law says:
“The seller may deduct from any deposit paid under the relevant contract an amount not greater than the termination penalty.”
In other words, the seller can only deduct up to 0.25% of the purchase price, and only from what has actually been paid as a deposit.
That means if the buyer only pays a token deposit (say $500 or $1,000), and 0.25% of the purchase price is more than that amount, the seller is out of luck – they can’t pursue the difference.
What should sellers do?
If you’re a seller (or advising one), it’s important to:
✔ Ensure the initial deposit is more than 0.25% of the purchase price
✔ Check that the contract provides for this amount to be paid upfront (not deferred until after cooling-off)
✔ Understand that you can’t demand more than the deposit already paid, even if the 0.25% figure is higher
This small detail can have a big financial impact.
Final Word
Cooling-off is designed to protect buyers – but sellers also need to protect themselves by ensuring the contract is properly prepared and the deposit is sufficient to cover any potential termination.
If you’re buying or selling and want help understanding your rights during the cooling-off period, our property team can help.
