What is a Section 32?

Whether you are buying or selling property, you are likely to come across a Section 32. It is also known as a 'Vendor's Statement'. It comes from Section 32 of the Sale of Land Act 1962 (Vic), which requires certain documents and information to be disclosed when selling a property. Before a Purchaser signs a contract for a property, they must be provided with a Section 32, signed by the Vendor.

It is an important document, as it discloses relevant, important matters to the land and any buildings so that a Purchaser might make an informed decision about purchasing.

Information in a Section 32 includes:

  • Evidence of title, proving that the vendor owns the property and is entitled to sell it,
  • Financial matters, such as any mortgage, if the property is being rented, and outgoings such as water rates and council rates,
  • Any insurance details including insurance of any building constructed in the past six years (a requirement through the Building Act 1993),
  • Details of any easements, covenants or restrictions,
  • If the property is accessible by road, if it is in a bushfire area, and other planning matters,
  • Any notices that affect the land, such as a VicRoads notice,
  • Any building permits that have been issued in the past seven years,
  • If there is an owners corporation and details of it,
  • Services connected to the land, and
  • Any other relevant matters.

Consequences of non-compliance

The consequences of non-compliance can be serious. Examples of non-compliance include:

  • Providing false information about a particular aspect of the statement, such as undervaluing rates in an attempt to attract more buyers,
  • Failing to adequately disclose required information such as building permits issued over the last seven years,
  • Failing to even provide a Section 32 statement at all.

In the event of non-compliance, a Purchaser may withdraw from of the contract before settlement. This is also the case if the Section 32 was not signed by the Vendor before the Purchaser signs the contract.

How is the Section 32 different to a Contract of Sale?

When selling property, these documents will be connected. However, in practice, the Contract of Sale will contain the contractual terms such as GST conditions, auction conditions, deposit payment conditions, and default conditions, to name a few. On the other hand, your Section 32 is a disclosure document, as discussed above.

It is important to always obtain legal advice to prepare both the Contract of Sale and the Section 32 so that any special conditions, in addition to the standard general conditions, can be inserted into the Contract, and so providing adequate disclosure to prevent the Contract from being ended.

How can Sharrock Pitman Legal help me?

Here at Sharrock Pitman Legal, we have an Accredited Specialist in Property Law, and have a team of experienced property lawyers who can guide you through all the requirements that comprise the Contract of Sale and Section 32. Through precise and careful drafting, you can be assured that we are protecting your legal and financial interests. Buying or selling real estate involves a major, expensive asset where even inadvertent mistakes can be very costly indeed. Remember, we will be:

On Your Side

The information contained in this article is intended to be of a general nature only and should not be relied upon as legal advice. Any legal matters should be discussed specifically with one of our lawyers.

Liability limited by a scheme approved under Professional Standards Legislation.

For further information contact  
Andre Ong

Andre is a Principal of Sharrock Pitman Legal.

He heads our Property Law Group and is an Accredited Specialist in Property Law (accredited by the Law Institute of Victoria).  He also deals with Commercial Law. For further information, contact Andre Ong on his direct line (03) 8561 3317.

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