What is a Section 32 Vendor’s Statement?

What is a Section 32 statement? “Section 32” is a common term used today. You hear it  often used in real estate transactions. It is sometimes also referred to as a Vendor or Vendor’s Statement.

But what exactly is a Section 32? Where does it come from? And why is it so important?

If you are thinking about buying a house, you will notice, for the most part, a contract for sale of land is given to you by the real estate agent. Furthermore, you will, more often than not, have  a Section 32 Vendor’s Statement attached. It is very important for you as a prospective purchaser to understand what is in the Section 32 Vendor’s Statement. as it contains information relating to the property you are about to buy.

If you don’t receive a Section 32 Vendor’s Statement when a contract for sale of land is given to you, get professional help immediately as you will not have been given very important information relating to the property you are about to buy.  But let’s head back to the topic.

What is Section 32?

The term “Section 32” actually comes from a piece of legislation called the Sale of Land Act 1962 (Vic) (“Act”). The Act prescribes information that must be disclosed to prospective purchasers of land.[1] The types of disclosures are set out in sections 32A to 32I of the Act. This is important because these disclosures affect you as the prospective purchaser of the property that you are about to buy.

For example, the disclosures may include:

• Financial matters [2]
• Insurance details [3]
• Notices [4]
• Building permits [5]
• Owners Corporation [6]
• Growth Area Infrastructure Contribution Details [7]
• Non-connected services [8]
• Evidence of Title [9]

It is a requirement that the vendor also sign the Section 32 Vendors Statement when the disclosures are provided to you, and these disclosures should be made to you before you sign the contract to buy the property[10] . At the time of signing the contract, you will also sign the Section 32 Vendor’s Statement to acknowledge its contents. What you do not want to do is sign a contract to buy land and then find out there are many and/or various problems associated with the property that you didn’t realise because either you didn’t review the Section 32 Vendor’s Statement or certain things weren’t disclosed that should have been.

Why is a Section 32 Vendor’s Statement important?

A Section 32 Vendor’s Statement should provide you with prescribed Information of what is affecting the land.

These details can include:[11]

• who your Council is?
• what are the arrears on rates, if any?
• does the property have services such as gas, electricity or water?
• has there been any building permits issued for the past 7 years? 
• whether there are any government notices like compulsory land acquisitions that you should be aware of?
• easements that you should know about before purchasing?
• any leases or licences that should be brought to your attention?

These questions are important. Let’s give a few examples of why.

You might come to an inspection of a property and see a nice comfy bungalow in the back yard.

But what you may not know is that the bungalow was built 5 years ago without a building permit. Imagine if the Council came and found out the bungalow was illegally erect in your backyard and asks you to remove it? Sounds like a nightmare already. Well they can, and they do.

Or, imagine the land is leased and you never knew about that, but you’ve already paid the vendor the purchase price for the land. You may not be able to evict the tenant because of the lease but you already have removalists booked to move you into the new home, and worse still nowhere to live.

What should I do moving forward?

The decision to purchase a new home is significant. For most people it’s the most expensive decision they will make. It is important that as a prospective purchaser you:

• check the contract to make sure that it has a Section 32 Vendor’s Statement signed by the Vendor; and

• consult a Property Lawyer to review the Section 32 Vendor’s Statement and the contract

It is always best to have the contract of sale for land reviewed by a lawyer before committing to buy the property.

How can DSA Law help?

If you have a property law issue  or are buying a property, please Contact Us or one of our Property Lawyers at DSA Law on (03) 8595 9580 so we can assist you.

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[1] Sale of Land Act 1962 (Vic) s 32. For general information, see Consumer Affairs Victoria, Conveyancing and Contracts for Sellers (15 December 2019) <https://www.consumer.vic.gov.au/housing/buying-and-selling-property/selling-property/conveyancing-and-contracts-for-sellers>.

[2] Ibid s 32A.

[3] Ibid s 32B.

[4] Ibid s 32D.

[5] Ibid s 32E.

[6] Ibid s 32F.

[7] Ibid s 32G.

[8] Ibid s 32H.

[9] Ibid s 32I.

[10] Ibid s 32.