Cooling off on major VIC building contracts: section 34 mechanics in detail

What it is

Section 34 of the Domestic Building Contracts Act 1995 (Vic) gives a building owner a five clear business day cooling off period after signing a major domestic building contract. The owner can cancel the contract during that window with very limited financial consequence. The right is statutory and cannot be contracted out of.

TradeLens treats the cooling off notice as a mandatory contract artefact. The platform will not mark a major domestic building contract as compliant until the signed cooling off notice is uploaded against the project file. If a builder accepts a deposit before the notice is given the platform raises a contracts flag because the deposit becomes refundable in full if the owner exercises the right.

Major versus minor: which contracts attract the right

Cooling off only applies to a major domestic building contract. The definition lives in section 3 of the Domestic Building Contracts Act 1995 (Vic):

• A major domestic building contract is a contract for domestic building work where the contract price is more than $10,000
• A contract under that threshold is a minor work agreement

The $10,000 figure includes GST and includes the value of any materials supplied. The threshold has not moved since the Act commenced, although a Domestic Building Contracts Amendment Bill 2025 is currently before Parliament that would refresh several thresholds. As of May 2026 the $10,000 figure still applies.

For prime cost item heavy contracts the price is the contract price including allowances, not the final cost after PC adjustments.

When the clock starts

The five clear business days run from the day the owner receives a signed copy of the contract. Three points trip up builders:

• The day of receipt is not counted
• Weekends and public holidays are not counted
• The clock only starts once the owner has the signed copy with the cooling off notice attached

If the builder hands over the contract on a Tuesday before a long weekend, the cooling off window does not expire until the following Tuesday at the earliest.

The cooling off notice

A major domestic building contract must contain or attach a cooling off notice in the form prescribed by the Domestic Building Contracts Regulations 2017 (Vic). The notice must:

• State that the owner has the right to end the contract within five clear business days
• Set out the address for service of the cancellation notice
• Be prominently displayed in the contract

If the notice is missing or non-conforming, the cooling off period does not start running and the right effectively remains open indefinitely until the work is complete. This is a high-stakes drafting error.

Exercising the right

The owner ends the contract by giving the builder a signed cooling off notice within the window. There is no fee and no need to give reasons. The contract is at an end from the time the notice is given.

Money flows after cancellation

Section 34 sets out what each side keeps and refunds:

• The builder must refund all moneys paid by the owner, except an amount that compensates the builder for reasonable costs incurred before notice of cancellation, capped at $100 plus any out of pocket disbursements (for example, for a soil test or site survey actually carried out)
• The owner is not liable for any other amount

A clause that tries to charge a higher cancellation fee or that imposes a retention is void to the extent it conflicts with the section.

When cooling off does not apply

The right does not apply where:

• The owner received independent legal advice from a lawyer in private practice (not the builder lawyer) before signing, and the lawyer has provided a certificate to that effect attached to the contract
• The work is a minor work agreement under $10,000
• The contract is between two builders for work the second builder is going to carry out

The legal advice exclusion is the one builders sometimes try to push. The lawyer must be independent. A solicitor recommended by the builder, paid by the builder or otherwise compromised does not meet the standard.

What this means in practice

For a builder selling a new home, the cooling off right means do not commit to suppliers, do not start design work that you cannot back out of and do not lodge a permit application until the window has closed. The five days feels short but it is the moment owners change their mind, get a second quote or have a relative review the contract.

For a renovation builder the same logic applies, with the added wrinkle that demolition or strip-out cannot start during the cooling off window.

TradeLens compliance gate

TradeLens wires the cooling off window into the project timeline. The platform calculates the five clear business days from contract receipt, blocks deposit-related milestones until the window expires, and reminds the project owner before any commitments lock in. If the owner does cancel, the platform automatically generates the refund schedule with the $100 statutory cap pre-populated.