Question: I recently decided to purchase a 3-bedroom investment property, but pulled out of the sale when the building report came back with a number of major faults. The sale had a cooling off period, but I only alerted the agent of my pulling out of the purchase at the last minute on the last day. This I did via email and received acknowledgement from the agent.
The problem is how I notified my solicitor. I also sent her an email, but because my inbox was oversized at the time, my email account only sent it out the next day. Now both the agent and my solicitor tell me I am bound to the purchase because I didn’t let my solicitor know within the cooling off period.
I am now wondering what my position is. Will it make a difference that I emailed the agent, tried to email my solicitor and didn’t pay the 10% deposit? Will I really be bound to go ahead with the purchase?
Answer: Your situation raises a number of issues. The first is whether a contract exists. This can only be determined by looking at the documents. If there is no valid contract then you are not bound by anything. You will not need to pay the (balance of the) 10% deposit on or before the end of the cooling off period and you will not be bound to go ahead with the purchase.
If there is a valid contract then the question becomes was the “pulling out”, or to use the proper term, rescission, effective? There are a number of issues to consider whether a rescission was valid.
The first is if the notice rescission was served before the cooling off period expired. If the notice was not served on time, the rescission won’t be effective. From what you say, it appears that the notice was given in time, but the question is whether the agent received the email notice on or before the last minute on the last day. One second late is too late. This can only be determined by the facts and the time stamp on the email received by the agent.
Another issue is whether the wording of the email was effective. If the wording did not contain all the relevant information, the rescission is not likely to be effective. This can only be determined by looking at your email’s content.
A further issue is if the notice was served through a valid method of service. The contract for the sale of land and relevant legislation permit certain methods of service, which include methods agreed to between the parties.
If the contract says that service of documents on the vendor is effective if documents are emailed to the vendor or to the vendor’s representative (the agent in this case), the rescission will be effective. If that is the case, the purchaser is not legally bound to complete the purchase but has to forfeit 0.25% of the purchase price to the vendor.
If service of notices is not permitted by email, the notice that you sent to the agent is most likely not valid. Your pulling out of the contract won’t likely be effective and you are legally bound to pay the deposit on or before the end of the cooling off period and to complete the purchase in the time specified in the contract.
In relation to notifying your solicitor, it appears that your solicitor received your instruction to rescind after the deadline passed. It won’t make a difference that you tried to email her earlier.
So at first glance (and without having the documents to look at), it appears that both the agent and solicitor are correct in telling you that you are bound to the purchase.
- Answer provided by David Singh, Conveyancing & Property Lawyers Pty. Ltd. (conveylaw.com.au)
Disclaimer: The information in this article is of a general nature only and should not be relied upon as legal advice. You should seek advice for your particular circumstances before entering into any transaction.
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