By Guest Blogger, Jared Zak
Principal Solicitor, Dott & Crossitt
The Australian population is on the move, with more interstate transactions happening now than ever before. According to PEXA, the amount of simultaneous buy-and-sell transactions reached a record high in 2023 – and that trend is set to continue in 2024.
While new financial technology like PEXA certainly makes the task of interstate moving a lot easier, there are still some challenges that people need to be made aware of – essentially down to the fact that local property laws vary from state to state.
Different cooling off periods
The first thing you need to be aware of is that different cooling off periods apply depending on how and where you buy and sell your property. A ‘cooling off’ period is the period under state-based consumer protection laws in which purchasers are permitted to pull out of a contract and get most of their money back.
In New South Wales, for example, the statutory cooling off period is five business days whereas in South Australia cooling off periods are only 2 business days – and in Western Australia there are not cooling off periods at all!
Coupled with that it may be that there is no cooling period for a particular transaction based on other factors like whether it is sold at auction, a rural property or if a written waiver is obtained.
It is important to understand the difference in cooling off periods to ensure that you don’t unconditionally commit to an interstate purchase prior to your own sale becoming unconditional – it’s an easy mistake to make!
Different finance conditions / pest & building periods
Layered on top of statutory cooling off periods, a lot of states (but not all of them) commonly give purchasers other rights to walk away, for example if their finance is not confirmed within a certain period or their pest & building report comes back with issues.
These are commonly called finance dates and pest & building dates and typically go for 10 days (but sometimes shorter or longer).
Like the statutory cooling off periods, the purchaser can ‘walk away’ from the contract during this period so it is important not to commit unconditionally to another purchase until these conditions have been satisfied or waived.
Different grace periods at settlement
And if the cooling off periods weren’t confusing enough, there are different ‘grace periods’ that apply at settlement if one side is late to settle depending on what state or territory you’re in. This can also have quite serious implications for a simultaneous settlement.
For example, in New South Wales the standard grace period if 14 days, whereas in Queensland the standard grace period is 7 days. So, if you’ve sold a property in New South Wales and your buyer is late to settle you have no real recourse against them until after your Queensland vendor has potentially terminated your contract on day 7.
These are standard grace periods and can be amended through the agreement of the party, but it requires some foresight and planning – so you need a solicitor or conveyancer who is across the intricacies of interstate conveyancing legislation.
Conclusion
Interstate simultaneous transactions are becoming increasingly common, but they do require some careful planning and strategy because of the different local conveyancing rules. It is important to instruct a solicitor who has an understanding of all concerned jurisdictions and one that act for you on both the purchase and the sale. Dott & Crossitt Conveyancers + Solicitor is uniquely placed as a firm being able to advise and act in all states and territories in Australia. If you’re considering an interstate transaction, please get in contact with us at https://www.dottandcrossitt.com.au/contact
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