Cooling-off Rights to Property Transactions

27 March 2019 ,  Fanie Botes 3105


By Fanie Botes

Director: Commercial – Millers Inc

A purchaser should be 100% sure that he or she wants the immovable property before signing any contract. As soon as the offer to purchase has been signed by both the purchaser and seller, it immediately becomes a legal and binding sale agreement. The question often asked by purchasers or consumers is whether goods can be returned after being purchased, and whether a contract can be cancelled after being entered into. The answer to this question is simple; yes. As a purchaser or consumer you have a right which allows for the cancellation of a contract or the return of goods within a certain period of time. This right is known as the cooling-off right.

In terms of section 16(3) of the Consumer Protection Act (the CPA) and section 29A of the Alienation of Land Act, the cooling-off period is only available in instances of direct marketing, which includes approaching a person either by mail, electronic communication or in person. The consumer has a period of five (5) business days from the date of the conclusion of the agreement or delivery of the goods purchased to cancel the agreement. Written notice must be given to the seller within 5 business days.

In respect of the above, the consumer can return the goods, cancel the entire contract without penalty, and receive a full refund as long as the goods are returned or the agreement is cancelled within 5 days from the date of the purchase. This is also applicable in respect of the purchase of immovable property.

The Alienation of Land Act (the Act) makes provision for the cancellation of a sale agreement between the purchaser and seller within five (5) days of signature of the agreement. The date from which a purchaser may exercise the cooling-off right should be the date of conclusion of the sale agreement, and not the date of delivery i.e. the date of registration of the immovable property in the name of the purchaser.

Section 29A of the Act only allows for a cooling-off period in instances where the immovable property was bought in terms of direct marketing, and where the purchase price of immovable property or land is less than R250,000. It does not apply to residential properties sold for more than R250,000.

The seller will have ten (10) business days after the cancellation of the agreement by the purchaser to refund the purchaser of the purchase price in full or refund any monies paid by the purchaser. Every offer and/or sale agreement must state that the purchaser is entitled to revoke the offer or terminate the sale agreement.

The cooling-off period is only applicable if the purchaser is a natural person and the immovable property is bought for residential purposes. A purchaser of agricultural land does not enjoy a cooling-off right.

The cooling-off period will not apply where the purchase was at a public auction; the seller and purchaser have previously entered into a deed of alienation of the same land or a similar transaction for the same land; the purchaser has reserved the right to nominate or appoint another person to take over the rights and obligations of the agreement; and the purchaser purchased the land by the exercise of an option.

Other than the CPA and the Alienation of Land Act, section 121 of the National Credit Act also allows for a cooling-off period of 5 business days to terminate lease- or installment agreements.  


It is important for purchasers of immovable property to know when the cooling-off period applies and also to know that it can only be used in certain instances. Many people can relate to the feeling of regret or despair after spending hard earned money. As a purchaser you should ensure that you conclude the sale agreement in a considered manner in order to avoid any obstacles associated with buyer’s remorse.