If you're buying or selling property in Victoria you'll likely be asked the question: have you got the Section 32? But what is it? In this guide you'll learn everything you need to know about s32 Vendor Statements.
What is a Section 32?
A Section 32 Vendor Statement is a disclosure document that needs to be given to purchasers before they sign a contract to buy real estate. It contains mandatory disclosures about the property required by law.
If this document is not given to the purchaser before they sign the contract, it entitles the purchaser to end the contract at any time before settlement and get all their monies back. So it's very important to prepare one when selling property. And if you're buying property, you need to review it before buying as it contains important information about the property.
I'm a Vendor, do I need to prepare a Section 32 Statement?
Yes. If you want to have a binding contract, you do.
If you don't provide a section 32 statement before your purchaser signs the contract, the purchaser can end the contract at any time before settlement and get all their money back. It's an essential document.
A section 32 example prepared by our office.
What is included in a Section 32 Vendor Statement?
The Vendor statement must include all information outlined in sections 32A to 32I of the Sale of Land Act 1962 (Vic), being:
- Title search and plan of subdivision, which shows the owner of the property and location and dimensions of the land.
- Any restrictions on the property title, like mortgages, caveats, restrictive covenants, easements, government notices or charges etc.
- Financial matters about the annual rates, taxes, owner’s corporation fees or other costs charged to the land like GAIC levies.
- Planning schemes that affect the property, like bushfire prone area, zoning etc and road access details.
- Notices or orders on the land given by any Public Authority or Government Department
- Services that are connected to the property: electricity, gas, water, telephone, sewage (or if no sewage, details of the septic tank).
- Building permits issued in last 7 years.
- Details of any owner-builder works in last 6.5 years.
- Any applicable insurance details, such as owner builder insurance or building insurance (if contract says property is purchaser's responsibility from day of sale).
- Information regarding any owner’s corporation that affects the property.
- Due diligence checklist.
- Any material facts about the property.
I'm a Purchaser, what should I look out for when reviewing a Section 32 in Victoria?
You or your solicitor should carefully review the Vendor Statement based on how you will be using the land. For example, if you are buying a property to develop it, zoning and any development restrictions will be of great interest for you. If you're buying the property as your home, you will want to know what your annual rates are, if any permits exist for works that have been done, or any material facts that impact the house.
It's important to carefully review your s32 Vendor Statement.
What happends if I don't provide a Section 32 in Victoria to purchasers or if it's misleading?
If you don't provide the certificate at all, your purchaser can end the contract at any time and get all their monies back. If you're using a real estate agent to sell your home, their commission may still be payable in this circumstance, so you must have it before you sell.
If your Section 32 is misleading or deceptive, it also gives the purchaser the opportunity to end the contract depending on the circumstances. It may also open you up to litigation risk after settlement depending on the severity of the matter. The safest approach to preparing these documents is to make full and frank disclosure.
Who prepares the property Section 32 Disclosure Statement?
Your solicitor will prepare your section 32 statement for you. This is one of the first things you need to do before putting your property on the market as no purchaser will want to buy your property until they review the document. It is recommended you get one prepared as soon as possible. Our office can assist you with this.
How long is a section 32 valid for in Victoria?
Your section 32 will be valid until any information within it change and need updating. The general rule of thumb is that you should update your section 32 when new rates are levied, permits issued, title details change, material fact occurs, or annual general meeting for your owners corporation occurs. For example for a standard free-standing house, if nothing material has changed, it will be valid until the end of the financial year when new rates are issued.
How much does a section 32 for real estate cost in Victoria?
Most section 32 statements are prepared on a fixed fee basis. Its cost will depend on the amount of certificates required to be ordered. Houses require less certificates, whereas apartments require more due to owners corporation certificates. Please contact our office for a quote for a fixed fee preparation cost.
Need help preparing or reviewing a Section 32?
Our property solicitors can help you prepare or review your section 32 for your conveyancing transaction. Feel free to call us on 03 9708 5564 or reach out via the contact form for a quote and to get started.
Disclaimer: The information in this post concerns Victorian law and should not be relied upon for legal advice, but is general in nature. Please contact our office for advice for your circumstance.