Category Archives: Wills and Estates

Cooling Off

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Cooling Off

When entering into a contract of sale for the purchase of property, the Sale of Land Act has provided the buyer with the right, in certain circumstances to ‘cool off’ and end the Contract of Sale without any further liability.

This right to ‘cool off’ has created an exception to the traditional rule of contract law that once you sign a contract it becomes binding and enforceable.

What this means is that a contract for the purchase of residential property will only become binding and enforceable, three clear business days after the buyer has signed the contract.

Three clear business days means that the day of signing is not counted and should a contract of sale be signed by a buyer on the weekend, time doesn’t start ticking until the following Monday. The trigger that starts time ticking is when the purchaser signs the contract irrespective of when the seller signs. Curiously at this stage the contract is still not binding and will not be binding until the seller signs, however time for the buyer will nevertheless start ticking.

Should the seller fail to sign the contract within that three day period, the buyers right to cool off will expire. However the buyer can still end the contract by formally withdrawing its offer to purchase because the contract has yet to come into existence. In this event the purchaser is still entitled to a full refund of any money that may have been paid.

However it is important to be aware that you do not have the right to cool off in all circumstances.

If you purchase at auction or within three clear business days before or after and auction, if you have previously entered into a contract of sale in respect of the same property or if the purchaser is a real estate agent or company you do not have the right to cool off.

Previously a buyer who sought legal advice from a lawyer about the contract of sale before signing that contract, lost the right to cool off. However the law was recently changed to allow a buyer to seek legal advice before signing a contract and still retain their cool off rights.

This means a buyer who has their lawyer review the contract of sale, prior to singing is still entitled to take advantage of the cool off rights and cool off if they so desire.

In order to cool off, notice must be provided in writing to either the vendor, vendors agent or vendors lawyer. There are no formalities as to how this notice is to be provided meaning that a simple hand written letter would suffice.

Once you have cooled off and the contract has been ended the buyer is entitled to a refund of any money, usually the deposit that has been paid. In these instances the seller must return any money which has been paid less $100.00 or 0.2% of the purchase price, whichever is the greater.

Any special condition contained within the contract of sale that attempts to remove the purchasers right to cool off will be unenforceable as is not possible to contract out of the Sale of Land Act.

In fact the Sale of Land Act obligates the seller to expressly include a notice in the contract of sale about the purchaser right to cool off. More often than not this notice will be contained on the front page of the contract of sale. A failure to include the notice will provide the purchaser with the right to end the contract.

As always this article contains general information only and should not be relied on for detailed advice related to your particular circumstances. Should you require such advice, please contact your lawyer.

Adam Zuchowski is a principal lawyer and property specialist with Network Legal & Associates.

The Importance of Having a Will

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The Importance of having a Will

After you have bought your house and moved in, the final part of any property transaction should be the preparation of a Will. If you already have a Will then now is the time to review it. In fact, after you have completed any major financial transaction or had children you should review your Will to ensure that it reflects your changing circumstances. In the event that nothing has changed you should still revise your Will regularly.

But what is a Will and why is it so important?

A Will is a formal legal document through which you express your final wishes and determine the distribution of your property when you pass away. This means through your Will you will decide and control who gets your property, known as your estate and how much of your estate the beneficiaries are entitled to.

Unfortunately nearly half of all Australians do not have a Will. And for those who do have a Will it may not be a true reflection of their wishes. Some people also take short cuts when doing their estate planning, such as using an online will or a Post Office Will kit. Often mistakes are made rendering these cheap Will alternatives invalid.

If you die without a valid Will the law decides who gets your assets. This is called ‘dying intestate’.

These laws apply to everyone and do not take into account an individual’s wishes or situation.

Should a person die without a Will (and assuming that person had no children), their domestic partner will inherit the estate. A domestic partner can be either a legal spouse or a defacto (of either sex) who had been in a relationship with the deceased for a minimum period of 2 years.

In the event that the intestate deceased had children, a spouse or domestic partner is only entitled to the first $100,000 of the estate plus one third of the balance. The remaining two thirds of the estate will be distributed equally amongst the surviving children. This is not a good outcome for the domestic partner of the Deceased and invariably leads to expensive court proceedings.

Should the intestate be single and have no children the next in line to inherit the estate is the parents. Following this formula the next in line is the siblings, followed by grandparents, aunts and uncles, great-grandparents, nieces & nephews, first cousins, great nieces and nephews, first cousins once removed, second cousins and finally remote kin.

When there are no surviving relatives or they cannot be located, the estate passes to the government.

In order to deal with the deceased’s estate, someone will need to apply to the Supreme Court for a grant of ‘Letters of Administration’. In most instances this person is the spouse or next of kin. If no such person exists, the Court will appoint any person it thinks fit.

Once Letters of Administration has been granted, the person making the application becomes known as the ‘Administrator’ and will then deal with the deceased estate in accordance with the law.

The major shortcoming of dying intestate is that your assets will not be distributed in accordance with your wishes. Someone who you would want to provide for may in fact miss out entirely on an inheritance.

Expensive disputes inevitably arise when a person dies intestate. These disputes inevitably pit family members against each other.

The purchase of a property provides an opportune time to draw up a will or update an existing Will.

As always this article contains general information only and should not be relied on for detailed advice related to your particular circumstances. Should you require such advice, please contact your lawyer.

Adam Zuchowski is a principal property lawyer with Network Legal & Associates, which includes an experienced Wills & Estate team.