Cooling-Off Periods for Rural Land

Rosy Sullivan

We have investigated this on numerous occasions and believe that we know what we are talking about and then students inform us that solicitors and conveyancers are telling them a different process is to be implemented.  This College Chronicle is for all those agents who have been seeking clarification on this issue.  Particular thanks go to Tyson from the Central Coast for the motivation to get this one published.

So………how long IS the cooling off period for rural land sales? 48 hours? 5 business days? None at all?

It may come as a surprise to many rural agents to learn that there are, in fact, no legally specified cooling off periods for rural property sales.  We have spoken to several rural and stock and station agents, some with decades of industry experience, who have always assumed that purchasers of rural properties have a contractual right to a cooling off period.  Perhaps you’ve operated under the same assumptions as well.  After all, all standard form contracts have a cooling-off period clause, right?  Let’s take a closer look.

Section 66X of the Conveyancing Act 1919 (NSW) requires every contract for the sale of residential property to contain a clause which provides for a 5 business day cooling off period.  Important:, this provision only applies to residential properties.  Confusion arises from the fact that many rural properties are sold under a standard form contract for the sale of land which can be used for residential or rural property sales.  However, when read carefully, these standard cooling off clauses refer only to residential property.

So how does residential property differ from rural property under the Act?  Section 66Q defines residential property as land that has no more than two places of residence on it, or a lot in a strata scheme comprising of only one place of residence.  Residential property does not, however, include land or a lot that is used wholly for non-residential purposes, or land that is more than 2.5 hectares in area.

On the other hand, rural land is land that is used or apparently intended to be used for gain or profit from agricultural activities.  Even if the land is only used for residential purposes, the fact that the land is ‘apparently intended’ for agricultural use is enough to make it rural property.  Therefore, your country weekender might be deemed to be a rural property even if it has not been troddon by cow hooves for decades.

Once you have determined that a property is not a residential property under s66Q, there is no legal obligation for the contract for sale of that property to contain a cooling off period.  So, for the rural agents out there, re-read the cooling off period clauses in the contracts you use.  You will most likely find that they refer to residential properties and do not apply to your rural clientele.