In Focus

Auction and private treaty in Canberra

Canberra sells houses and units in two rhythms that get talked about as if they were personalities. Private treaty is an offer, a draft, a negotiation, and usually a cooling-off period unless an exception applies. Auction is a public contest with a contract that is generally unconditional once the hammer falls, and with no cooling-off period under the Act for a sale by auction. Lucas’s note separates the two so a first-home buyer does not bring the rules of one into the room of the other.

Neither path is a trick, and neither is a moral test. They are different clocks. Pick the clock with your eyes open, then brief a conveyancer before you are standing in a crowd or sitting at a kitchen table with a pen.

• Ask the agent which method this property is being sold by, and ask to see it in writing.
• Read the draft contract before auction day or before you make a private-treaty offer.
• Ask your conveyancer whether this contract has a cooling-off period.
• If it is an auction, assume you need your questions answered before you bid, not after.
• If it is passed in and you were on the bidders record, ask whether a same-day contract would still have cooling-off. Do not guess.
• Ask what the deposit clause says. Do not import a percentage from another sale.
• Ask whether any finance condition exists. If it does not, say so in your notes.
• Set a walk-away figure with the people you are buying with, before the emotion starts, and do not publish it to the room.
• If someone asks you to waive cooling-off on a private treaty, stop and read the section 17 guide. Waiver is a lawyer’s certificate, not a favour.
• Decide in advance who is allowed to bid or to sign, and make sure that person can attend.
• Leave a lender’s public page out of the auction. A bookmark is not a condition.

Private treaty and the cooling-off window

On a private treaty you offer, the seller may counter, and eventually someone prepares a contract for exchange. For residential property, the Civil Law (Sale of Residential Property) Act 2003 (ACT) gives many buyers a cooling-off period unless an exception applies. The Act’s current structure starts that period when the contract is made and ends it at 5 pm on the fifth working day. A buyer who rescinds in time can do so, and the Act describes a forfeiture of 0.25 per cent of the price, with the balance of deposit dealt with in the statutory way. That percentage is a description of the Act, not a fee Zenith Lens charges and not a number to round. Check the consolidated text with your lawyer, because statutes are amended.

Cooling-off is not a substitute for reading. It is a short door. Building reports, a careful lease reading and a frank talk about finance belong before exchange if you can possibly arrange them. The door helps when something you could not see becomes clear. It is a poor plan to exchange unread and hope the five days will carry a full due diligence. Your conveyancer can tell you what can realistically be done inside the window and what should be done before you walk through it.

A seller may ask you to waive the period so the deal is unconditional at exchange. Waiver, under the Act, requires legal advice from a lawyer and a certificate that complies with section 17, given before you enter the contract. Shortening the period has its own certificate rule. An agent’s reassurance is not the certificate. If you want the protection, do not sign it away to be polite. If you understand the protection and still instruct a lawyer to certify a waiver, that is your decision, made with that lawyer, not with this website.

Auction, and the passed-in afternoon

A sale by auction does not have the cooling-off period. The Act says so. Bidding is the offer. If the property is knocked down to you, you are expected to sign the contract that was on display, on the terms that were read, at the price you bid. There is no gentle hour afterwards in which the Act lets you change your mind. That is why the draft contract, the Crown lease, the inquiries and a conveyancer’s comments belong in the days before the auction, not in the car park after it.

Register as the rules of that auction require, and listen to the conditions read at the start. A late change announced on the day is still a change. If you do not understand it, do not bid and tell yourself you will clarify it if you win. You may not get that conversation.

If the property is passed in, the Act also removes cooling-off for a contract made on the same day where the buyer was recorded in the bidders record as a bidder, or as a person for whom a bidder was bidding. Same-day negotiations after a pass-in can therefore feel like a private chat and still sit outside cooling-off. Ask your conveyancer about your exact facts before you treat a Sunday evening signature as a treaty with a five-day door. If the contract is made on a later day, ask again. The calendar is the question. Do not interpolate.

Deposits and unconditional exchange

The deposit is whatever the contract says. People repeat “ten per cent” because it is familiar. Familiar is not the schedule. Read the schedule. Ask who holds the deposit and when it is paid. Ask your conveyancer what happens to it if completion fails. Those answers live in the contract and in practice between solicitors. They do not live in a chant at the auction.

Unconditional exchange means the contract no longer waits on a condition you hoped was there. A finance condition exists only if it is written. A building condition exists only if it is written. “The agent knows we need a loan” is not a condition. A lender’s public page, including any page listed in our separate comparison guide, does not insert itself into your contract. If you need the purchase to wait for a lender’s process, that has to be a clause your conveyancer drafts or reviews before exchange. If you exchange without it, plan as if the completion date will arrive whether or not a lender is ready. That sentence is stern because completion weeks are stern.

Auctions are public and private treaties are quieter, but both can be rushed by other people’s diaries. Your walk-away price is a household decision. Write it down. If you are buying with a partner, agree what happens if you disagree in the room: a code word, a step outside, a rule that silence means no. None of that is legal advice. It is how adults avoid buying a block they cannot live with.

Questions for the agent that keep the method clear

Ask: is this an auction, a private treaty, or an expression of interest that might become either? Ask for the contract early. Ask whether a cooling-off waiver will be requested. Ask whether the property is being sold by tender, because tender is another path the Act treats as having no cooling-off period. Ask who the seller’s solicitor is, so your conveyancer can speak to a named firm rather than to the marquee.

Ask nothing that invites a legal conclusion from the agent about your personal position. Agents can tell you the campaign method. Your lawyer tells you the effect on you. If the answers conflict with the contract, the contract is the document you take home. Bring it to the Moore Street questions only if you want help finding which guide to read next. We will not bid for you, and we will not hold a deposit.

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