What happens to the deposit when a purchaser exercises their cooling-off rights in NSW?
Correct Answer
B) 0.25% of the price is forfeited; the rest is refunded
In NSW, when cooling-off rights are exercised, the purchaser forfeits 0.25% of the purchase price to the vendor and the remainder of the deposit is refunded. This penalty compensates the vendor for taking the property off the market while providing an affordable exit option for purchasers.
Why This Is the Correct Answer
A purchaser who rescinds during the NSW cooling-off period forfeits 0.25% of the purchase price to the vendor, and the rest of any deposit paid is refunded.
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More Contracts Conveyancing Questions
Contracts for an established Wollongong home are exchanged by private treaty at 11 am on a Wednesday. There are no public holidays in the next fortnight and the buyer has not waived cooling-off. When does the buyer's cooling-off period end?
Under NSW conveyancing law, which situation means a residential purchaser has no cooling-off period?
Under what circumstances can a buyer waive their cooling-off rights in NSW?
A property contract in NSW contains a clause requiring the purchaser to obtain finance approval within 21 days, failing which the contract becomes null and void. The purchaser's bank approves the loan on day 22, but the purchaser wants to proceed. What is the legal position?
A property developer selling land in NSW fails to disclose a significant planning restriction affecting it. The purchaser discovers this after settlement. If the restriction materially affects the land's value and use, what is the most likely outcome?
- → A NSW selling agent arranges the exchange of contracts between buyer and vendor at the agency office. After exchange, what must the agent do with the signed contract?
- → A house is passed in at a Saturday auction in NSW. Negotiations with the highest bidder continue, and contracts are exchanged on the following Monday without any cooling-off waiver. Does the buyer have a cooling-off period?
- → A NSW agent signs up a vendor on Monday. The vendor's conveyancer says the draft contract will not be ready until Friday. The agent wants to put a 'For Sale' sign on the front fence on Tuesday. Is this allowed?
- → After exchange on a Newcastle house, the buyer's solicitor finds that the council planning certificate required by section 52A of the Conveyancing Act 1919 was not attached to the contract. What right does the buyer have?
- → A freestanding NSW house with a swimming pool is about to be listed. The pool is registered, but an inspector found the barrier non-compliant. Which document can be attached to the contract to meet the pool requirement?
- → A vendor's proposed contract names her solicitor as acting on the sale. A keen buyer arrives with a signed contract and a deposit, and the agent wants to exchange on the spot. The solicitor cannot be reached. What is the position?
- → A contract of sale in Queensland contains a clause stating 'time is of the essence' regarding the settlement date. The purchaser is ready to settle but the vendor cannot provide vacant possession until three days after the contractual settlement date due to tenant issues. What is the most likely legal consequence?
- → A Queensland residential property contract contains a building and pest inspection condition. The inspection report reveals significant termite damage. Under the standard REIQ contract, the buyer may:
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