Relying on the cooling-off period in QLD property? It could backfire..

In this blog/video, we explain why if you’re thinking of relying on the Cooling-Off Period in QLD property contracts, that could backfire, fast!

Many buyers assume the five business day cooling-off period is a no-strings trial window. Sign now, do checks later, walk away if needed. But the reality? It’s a legal safety net with strings, and consequences.

Hi everybody – George Sourris, Empire Legal.

Today’s topic: Relying on the cooling-off period in QLD property? It could backfire.

What is the cooling-off period in Queensland?

The cooling-off period in Queensland residential contracts is one of the most misunderstood concepts in conveyancing. Buyers often treat it as a no obligation trial period – sign the contract now, check things later, and walk away if needed.

But the reality is it’s far more complex, and if you’re not careful, relying on the cooling-off period could cost you thousands – or worse, put you in breach of contract. Let’s break down the legal mechanics, the commercial risks and the real world implications of relying too heavily on this short, sharp timeframe.

How long is the cooling-off period in Queensland?

What does the law say? Under Section 166 of the Property Occupations Act 2014, a buyer who enters into a contract for the sale of residential property, that is not a sale at auction, is entitled to a five business day cooling-off period, beginning the day they or their lawyer receives a signed copy of the contract.

This statutory right gives the buyer the ability to terminate for any reason within that timeframe. However, and this is where most buyers go wrong, the law also permits the seller to retain 0.25% of the purchase price if the buyer terminates during this period. So yes, you can change your mind, but no, it’s not for free.

How much does it cost to terminate under cooling-off?

Calculating the penalty. The termination penalty isn’t minor, especially in today’s property market. Here’s how the 0.25% fee plays out. Contract price – $1.2 million, termination penalty – $3,000. Even if you terminate on day one, before finance approval or building reports, the penalty still applies in full if you terminate under cooling-off, and it’s deducted from your deposit.

Which cooling-off traps do buyers miss most?

Trap 1: Waiving or shortening your cooling-off rights

Buyers may inadvertently waive their cooling-off rights by: signing a cooling-off waiver form that is attached to the contract, or signing a contract prepared before auction. Cooling-off does not apply to auction sales or post auction contracts entered into within two business days. Even in private treaty sales, sellers or agents may pressure a buyer to sign a waiver or shorten the cooling-off window as part of negotiations, especially in competitive markets. Once waived or shortened, the cooling-off right is gone. There is no reinstatement.

Trap 2: Cooling-off is not a finance condition

This is a critical distinction. The cooling-off period is not a substitute for a finance condition. If your contract is not subject to finance and you fail to obtain lending approval after the cooling-off period expires, guess what? You cannot simply terminate and walk away. You’re bound to complete the contract and may face termination, forfeiture of deposit, and even damages for breaches if you don’t settle.

We always advise buyers to ensure proper conditions – finance, building and pest, et cetera, are included before signing if they are required by that particular client for their needs.

Trap 3: Using cooling-off to do your due diligence

Big mistake. Some buyers believe they can use the cooling-off period to order a building and pest report, check body corporate records, review zoning, flood overlays, easements, or review a CMS or disclosure statement. But, five business days often is not enough, especially if the seller delays returning the executed contract, or if key searches take longer than expected.

Worse, once the cooling-off period ends, your right to terminate disappears, unless you’re relying on another condition or you can prove misrepresentation or breach. But I wouldn’t be relying on any of that.

How do you terminate under cooling-off correctly?

Now, a note on procedure termination – it must be valid.

Cooling-off terminations must: be in writing, be delivered to the seller or their solicitor before the deadline, and clearly state the buyer is terminating under Section 166 of the Property Occupations Act.

If the notice is late or sent to the wrong person, the contract may remain on foot, and the buyer could be held liable for non settlement. Empire’s top tips for buyers. Don’t rely on the cooling-off period as your plan A, treat it as your last resort, not your first safety net. Always get legal advice before signing – we can review for waivers, special conditions and timing risks. Be strategic with conditions, especially finance, building and pest, and due diligence clauses. And if you must terminate, make sure you do it properly and within the timeframe.

When exactly does the cooling-off period start and end?

Get this wrong by one day and you have no right to terminate at all.

Under section 166(1), the period starts on the day the buyer receives a copy of the contract signed by both parties from the seller, and ends at 5pm on the fifth business day. The day you receive it is day one. It is not five days from receipt, it is five business days counted from and including the day of receipt. The Act’s own example: receive the contract at any time on a Monday with no intervening non-business days, and the period ends at 5pm the following Friday.

If the copy arrives on a non-business day, the period starts on the first business day after. A contract received on a Saturday starts running Monday and ends 5pm Friday.

If the buyer signs after the seller, the buyer is taken to have received the copy when the buyer has both signed and communicated acceptance to the seller. Receipt by, and notice to, the seller’s authorised agent counts as receipt by and notice to the seller.

Does the cooling-off period pause over Christmas?

No, and this one costs people their termination right almost every year.

The Property Occupations Act does not define “business day”, so the Acts Interpretation Act 1954 meaning applies: any day that is not a Saturday, Sunday, or a public holiday in the place where the relevant act is to be done. That is the whole definition.

The exclusion of 27 to 31 December that everyone quotes is a term of the REIQ contract. It is not the statutory business day definition. Every contractual date freezes over that window, but the statutory cooling-off clock keeps ticking through 29, 30 and 31 December if those days fall on weekdays.

The same definition cuts the other way with regional show holidays. A public holiday “in the place” picks up local shows, so a Brisbane cooling-off period running through the Ekka is a day longer than the same contract in Cairns. If you are counting days in August in Brisbane, check the date.

When does the cooling-off period not apply at all?

Section 160 sets out the complete list. There is no cooling-off period where:

• the contract is formed on a sale by auction, meaning directly on the fall of the hammer;
• the property was passed in at auction and the contract is entered into by no later than 5pm on the second clear business day after, with someone who was a registered bidder at that auction;
• the contract is formed on exercise of an option granted under an earlier contract between the same parties, the cooling-off right attaches to the option contract instead;
• the buyer is a publicly listed corporation or a subsidiary of one;
• the buyer is the State or a statutory body;
• the buyer is purchasing at least three lots at the same time, whether or not under one contract.

Worth knowing: a property that is passed in and then negotiated is not a sale by auction, and neither is a contract formed through a tender process. In both cases the cooling-off period applies.

Does the seller have to warn you about cooling-off?

Yes, but the consequence of getting it wrong is not what most people assume.

Section 165 requires a seller giving a proposed contract to a buyer for signing to include a prescribed statement, conspicuously written, immediately above and on the same page as the buyer’s signature. It says the contract may be subject to a five business day statutory cooling-off period, that a termination penalty of 0.25% of the purchase price applies, and that the buyer should get an independent valuation and independent legal advice before signing.

Failing to include it is an offence carrying up to 200 penalty units. But it gives the buyer no right to terminate. That termination right existed under the old PAMDA warning statement regime, generated a great deal of litigation, and was deliberately abolished when the Property Occupations Act commenced in 2014. If you are relying on a defective warning statement to get out of a contract, you are relying on law that was repealed twelve years ago.

Is seller disclosure a better exit than cooling-off?

Very often, yes, and this is the part of the picture that changed on 1 August 2025.

Under section 99 of the Property Law Act 2023, before a buyer signs, the seller must give a disclosure statement in the approved form together with each prescribed certificate. If the seller does not, or if what was given is inaccurate or incomplete about a material matter, the buyer was unaware of the true position, and would not have signed had they known, section 104 lets the buyer terminate by written notice at any time before settlement.

Compare the two rights side by side:

• Cooling-off runs for five business days. Disclosure termination runs until settlement.
• Cooling-off needs no reason. Disclosure termination needs non-disclosure or a material inaccuracy.
• Cooling-off costs the buyer 0.25% of the purchase price. Disclosure termination costs nothing, and the seller must repay everything paid towards the purchase plus interest within 14 days.
• Cooling-off can be waived or shortened under section 167. Disclosure obligations cannot be contracted out of at all.

Two limits worth knowing. The rates amount and the water services amount are excluded by regulation from being material matters, so an error there gives no termination right. And the regime does not apply to proposed lots, so off the plan buyers are looking at the BCCM Act disclosure rights instead, which carry a material prejudice test and much tighter deadlines.

This is exactly why a contract should be reviewed by a lawyer before signing rather than during the cooling-off period. The rights that actually get buyers out of bad contracts are usually not the cooling-off right.

Should you ever rely on the cooling-off period?

The final word. In theory, the cooling-off period exists to protect buyers. In practice, it’s limited, misunderstood, and should be treated as an absolute last resort.

At Empire Legal, we review Queensland contracts every single day, and we’ve seen firsthand how assumptions around the cooling-off period can lead to financial losses, litigation, or missed opportunities. Our advice – don’t treat it like a backup plan, treat it like the high stakes window it really is.

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Well, guys, there you go. cooling-off period. Again, it’s a statutory right, unless it’s waived or shortened, shy of those auction example that we gave above!

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Ladies and gentlemen, please keep in mind that all advice is general in nature and does not constitute legal advice. This is authorised by George Sourris, Empire Legal, Brisbane, Queensland, Australia.

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