Cooling-Off in Tasmanian Residential Building Contracts

What it is

Tasmania does have a statutory cooling-off right. That is worth stating plainly, because the answer is not the same in every state. Western Australia has no statutory cooling-off for home building contracts at all. Part 7 of the Residential Building Work Contracts and Dispute Resolution Act 2016 (Tas) lets an owner withdraw from a residential building work contract within a set window, and it applies to the contracts the Act covers, which means a contract price of $20,000 or more.

The shape of the Tasmanian right is not the eastern-state model. Anyone arriving from New South Wales and counting from the date of signature will get the date wrong.

Five business days from the receipt day

Section 33(3) gives the owner 5 business days after the receipt day for the contract. The receipt day is defined in section 33(1) and it is not the signing day. It is the day the owner receives from the builder both a copy of the signed contract and a copy of the residential building consumer guide in effect under section 81(3). Where those two documents arrive on different days, the receipt day is the later of them.

The clock is triggered by delivery of documents, not by signature. A builder who signs on Monday and hands over the signed copy and the guide on Friday has started the owner clock on Friday. Business day is defined in section 4 and excludes Saturdays, Sundays, statutory holidays under the Statutory Holidays Act 2000 and public holidays throughout the State.

When the clock never starts

This is the provision builders should worry about. Section 33(4) says that if 5 business days have elapsed since the contract was entered into and there is no receipt day, the owner may withdraw. Not within 5 business days of something. Simply may withdraw. Section 33(5) preserves the ordinary right as well, so if a receipt day later arrives the owner also gets the standard window running from it.

The practical effect is that a builder who never hands the documents over leaves an open withdrawal right sitting across the contract. Section 35 adds a parallel route. Where the owner never received the consumer guide, the owner may withdraw within 7 days of becoming aware that they should have received it. Note the drafting: section 35 counts in days, not business days.

How to withdraw and what it costs

Section 36 requires a withdrawal notice, meaning a written notice signed by the owner stating that the owner withdraws and naming the section relied on. The owner must give it to the builder, leave it at the builder address shown in the contract or serve it under any service provision in the contract.

Money then moves under section 37. The builder may keep a retainable amount, being $100 plus any out-of-pocket expenses reasonably incurred in relation to the contract before withdrawal, and must refund the balance of anything pre-paid. Where nothing was pre-paid, or the pre-paid amount is less than the retainable amount, the owner pays the builder the difference and it is recoverable as a debt. Beyond that the owner has no liability at all for withdrawing.

Withdrawal under section 35 works differently. There the builder is entitled to a reasonable amount for work performed before withdrawal, capped at what the contract would have paid.

When the right does not exist

Section 34 removes the right in two situations. The first is where the owner and the builder previously entered a residential building work contract on substantially the same terms, for substantially the same services, relating to the same building or land. The second is where the owner received formal legal advice about the contract before entering it, or tells the builder that they did. Formal legal advice is defined narrowly as independent advice from a practising legal practitioner for which an amount is paid or payable.

Waiver is not available. Section 78(2) makes any exclusion, limitation, modification or waiver of a right conferred by the Act void, and cooling-off is such a right. A clause in which the owner signs away the cooling-off period is worth nothing.

How Tasmania compares

New South Wales also uses five days, but they are 5 clear business days and the entitlement attaches to contracts valued over $20,000. Western Australia has none. Tasmania sits between them: the same nominal length as New South Wales, but a trigger tied to the builder handing over documents rather than to signature, and an open-ended right where those documents never come.

For a builder, the lesson is procedural. Serve the guide before signing, serve the signed copy and the guide together, and record the date. That single date is what closes the window.