Disclosure of planning controls and approvals when selling land

Division 2 of Part 2 of the Sale of Land Act 1962 (SOL Act) sets out various matters that must be disclosed by vendors (in a Vendor’s Statement, or Section 32 Statement) to potential purchasers before a contract is signed.

Many items are clearly spelt out, leaving no room for ambiguity. There can be absolutely no doubt that a vendor must provide (for example):

• any building permit issued under the Building Act 1993 issued within the preceding 7 years (s 32E);
• information relating to any owners’ corporation affecting the land (s 32F); and
• disclosure if any services (electricity, gas, water, sewerage, telephone) are not connected.

However, the SOL Act also provides for disclosure of a range of matters in more general language, in respect of which judgement may need to be exercised.

We frequently see Vendor’s Statements that do not include nor make any reference to planning permits. There seems to be a widespread belief that these are not required to be disclosed. Perhaps this is because, where ‘planning’ is expressly mentioned in Division 2 of Part 2 of the SOL Act, no mention is made of ‘planning permits’.

Or, maybe the frequent exclusion of planning permits is due to an assumption that the matters that must be disclosed are those matters which encumber, or restrict, or limit the use or development of the land, and matters which (at least appear to be) beneficial to the land (such as planning permits) do not have to be disclosed.

However, the SOL Act provides that any ‘approval’ which ‘directly and currently’ affects the land, and of which the vendor ‘might reasonably be expected to have knowledge’ must be disclosed (s 32D(a)).

This has been held to include approvals to develop the land (see, for example, Bonacci v Ruyten [2000] VSC 138, [34]; Downing v Lau [2018] VCC 33, [11]). The significance of planning permits is immediately obvious when one considers that they are almost always issued subject to conditions, and responsibility for compliance with those conditions runs with the land (Planning and Environment Act 1987, s 126(2)).

Clearly, these principles also apply to approvals given under other legislation, such as heritage permits issued by the Director Heritage Victoria under the Heritage Act 2017.

Assuming that the vendor has knowledge of the permit under consideration, the question will be whether it ‘directly and currently’ affects the land.

Furthermore, the requirement to disclose any relevant documents which the vendor ‘might reasonably be expected to have knowledge’ means that vendors should take appropriate steps to investigate, and to satisfy themselves that they have disclosed all relevant documents.

Of course, if there is any doubt, legal advice should be sought as early as possible to avoid costly claims, or rescission of a contract.

Please contact us if you need any assistance with your property or planning related issues.

Luke English
Partner
Accredited Specialist – Environment & Planning

Ben Franklin
Senior Consultant
Accredited Specialist – Property