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Cooling-Off Period Exceptions in Queensland Property Contracts

Standard residential contracts include a buyer's cooling-off period, but several exceptions remove or modify it. Here is how the rules work and how they affect your strategy as a seller.

The standard Queensland residential property contract gives the buyer a five business day cooling-off period after the contract is signed. During this period the buyer can terminate the contract for any reason by written notice, with the seller entitled to retain a small termination penalty (0.25 percent of the contract price). Beyond the standard rule, several specific exceptions either remove or shorten the cooling-off right entirely.

Understanding these exceptions matters because they affect how you market the property, what kind of offers you take seriously, and whether a contract you sign is genuinely binding from day one or vulnerable to a five-day window of buyer's remorse.

⚠️ This is general information, not legal advice. Property contract law in Queensland is detailed, and the specific drafting of your contract may modify the standard rules. Always work with a qualified conveyancer or solicitor on your specific contract.

The standard rule

For residential property contracts in Queensland (typically using REIQ contract forms), the cooling-off period is five clear business days. The clock starts the day after the buyer (or their agent) receives the contract signed by both parties. Public holidays and weekends are not counted.

During this period, the buyer can terminate by written notice delivered to the seller or the seller's solicitor. The contract is terminated effective on the date of delivery. The seller is entitled to retain (or claim if not yet received) 0.25 percent of the purchase price as a termination penalty. Any other deposit paid is refunded.

This right exists to give buyers a window to undertake initial due diligence, finalise their finance approval, and reflect on the commitment. Most contracts run their cooling-off period without termination.

Exception 1: Auction sales

The most well-known exception is auction. Contracts entered at or following an auction are not subject to the standard five-day cooling-off period. The buyer is bound from the fall of the hammer, with no right to walk away.

This is one of the strongest reasons sellers consider auction as a method of sale. The contract certainty is significantly higher than a private treaty contract, where the cooling-off period is in play. Once the gavel falls, the contract is binding subject to the standard contract conditions (deposit, settlement, etc.) and not subject to the buyer's discretion to back out.

The exception applies to contracts:

Entered at the auction itself by the successful bidder or, in some cases, an under-bidder who is offered the property after the auction did not produce a sale at the reserve.

Entered within two business days following the auction by a buyer who registered to bid at the auction.

Entered immediately before the auction in some circumstances where the contract is treated as part of the auction process.

The exact application depends on the contract terms and how the post-auction sale is structured. If a private treaty offer comes in days after a passed-in auction, that contract is generally subject to the standard cooling-off period unless specific arrangements are made.

Exception 2: Buyer waiver with lawyer's certificate (Form 32)

The buyer can waive or shorten the cooling-off period by signing a waiver document supported by an independent lawyer's certificate. The certificate (commonly called a Form 32) is signed by a solicitor confirming the buyer has received independent legal advice on the consequences of waiving cooling-off.

This is sometimes offered as part of a competitive offer in a tight market. A buyer who wants to outbid other interested parties may waive cooling-off to give the seller the comfort of a binding contract from day one.

Key points:

The waiver must be in the prescribed form. A handwritten note or unsupported statement does not work.

The lawyer's certificate must be from an independent solicitor (not the seller's solicitor).

The buyer must genuinely receive the legal advice. A pro forma certificate without an actual conversation between the buyer and the lawyer can be challenged.

Sellers cannot require a waiver as a condition of the contract being accepted (this could be construed as pressure that invalidates the waiver). However, sellers can express a strong preference for offers that include a waiver, and the market understands this.

Exception 3: Buyer is a corporate entity in some commercial-style transactions

The cooling-off rules in Queensland apply primarily to residential contracts and to natural persons buying property for personal use. Where the buyer is a commercial entity entering a transaction in the course of business (such as a developer purchasing for development, or a commercial landlord acquiring an investment), the standard cooling-off period may not apply.

For typical inner east residential sales, this exception is rarely relevant. The buyer is almost always a natural person or a family-related corporate trustee, and standard cooling-off applies.

What cooling-off does NOT cover

It is also worth understanding what the cooling-off period does not protect the buyer against. Cooling-off allows the buyer to walk away for any reason within five business days. After cooling-off ends, the buyer is bound to complete the contract subject only to the contract conditions actually agreed in the document. Common conditions that may give the buyer further termination rights include:

Subject to finance. The buyer must obtain formal finance approval by a specified date or the contract can be terminated by either party.

Subject to building and pest inspection. The buyer must obtain satisfactory inspection reports by a specified date.

Subject to satisfactory title search. If the title reveals issues not previously disclosed, the buyer may be able to terminate.

Each of these conditions has its own specific termination mechanism and its own short window. They are separate from the cooling-off right and operate independently.

Practical implications for sellers

Knowing how cooling-off works should affect three things in your sales strategy.

Method of sale choice. If contract certainty is important to your circumstances (you have a settlement on a purchase, you cannot afford a fall-through), auction or a contract with a buyer waiver gives more certainty than standard private treaty.

Offer evaluation. When comparing two offers, an offer with a higher price but no waiver of cooling-off is not strictly better than a marginally lower offer with a Form 32 waiver, depending on your need for certainty.

Don't take the contract for granted on day one. A signed contract during cooling-off is not a settled sale. Avoid making irreversible commitments (signing a purchase contract on the next property unconditionally, for instance) until the cooling-off period has expired and any other major conditions have been satisfied or waived.

If a buyer terminates during cooling-off

It happens. Buyer's circumstances change, finance falls through unexpectedly, a personal issue arises, or simply a change of heart. The contract terminates and the seller is entitled to the 0.25 percent termination penalty.

The harder cost is usually relisting and the loss of campaign momentum. A property that comes back to market after a cooling-off termination often takes longer to sell on the second campaign because the original buyer pool has dispersed and the listing is now seen as having a problem (whether or not it actually does).

The best protection against cooling-off termination is to qualify buyers carefully before accepting an offer. A buyer with confirmed finance, no other contract pending, and clear time pressure to settle is far less likely to terminate than a buyer who is one of many active prospects across the market.