The cooling off period in the Consumer Protection Act may bring some serious, unwanted implications for estate agents selling property.
Once the sale agreement has been signed, the cooling off period allows an unhappy purchaser 5 days to get out of the agreement.
According to section 16 of the Consumer Protection Act, “a consumer may rescind a transaction resulting from any direct marketing without reason or penalty, by notice to the supplier in writing and within 5 business days after the later of the date on which:
However, if a purchaser simply changes their mind about the sale, the cooling of period in the Consumer Protection Act (CPA) does not apply.
In accordance with The Alienation of Land Act, residential property transactions which amount to R250 000.00 or less are subject to a cooling-off period of 5 business days starting from the date on which the offer to purchase was signed.
Residential properties sold at more than R250 000.00 do not qualify for the cooling off period and the CPA cannot influence this provision.
Purchasers who have purchased property as a result of direct marketing is entitled to the cooling-off period. This only applies to sales that have resulted from direct marketing.
In terms of the Act, direct marketing includes to “approach” a potential buyer either in person, by mail or by electronic communication such as SMS or email with the intention of promoting a sale or offering to supply goods or services to the person.
Additionally, sales that result from any other form of marketing such as conventional print advertising or show houses, do not qualify for the cooling-off period.
The purpose of the cooling off period is to closely monitor and regulate how suppliers or estate agents operate while protecting the rights of the consumers who are buying property.
All property professionals including estate agents and agencies must educate themselves of the possible implications of the cooling-off period.
Furthermore, they should prepare for potential changes in the way they will be required to interact with property sellers and buyers in the future.
To learn more about the cooling off period in the Consumer Protection Act, including when it is applicable or not, contact us.
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