Preparing to sell your property can be exciting and many sellers (vendors) are eager to get the process completed promptly. However, Section 32 of the Sale of Land Act 1962 (Vic) (the Act) imposes certain obligations on sellers, and it is important that they are complied with to ensure a smooth settlement process.
One of the fundamental requirements of every sale of land is that a Section 32 statement is prepared.
What is a Section 32 statement?
A Section 32 statement is a legal document that must be provided by the seller (vendor) to an intending purchaser. A defective Section 32 statement entitles a purchaser to terminate the contract of sale of land at any time before settlement, making it vital that the provided Section 32 statement is compliant.
Why is a Section 32 statement needed?
There are many factors that buyers will evaluate prior to purchasing a new property, including the location, size, price, or suitability of the property for their intended use.
However, there are other factors that purchasers should be aware of, that are perhaps not as obvious. For example, a property may be subject to building permits, easements, restrictive covenants or owners corporation fees.
The Act provides that such matters should be brought to the attention of purchasers before they buy the property. The Section 32 statement therefore imposes an obligation on the vendor to provide the buyer with this information regarding a property.
This ensures that purchasers can make an informed decision, when choosing to buy aproperty.
What should be included in a section 32 statement?
Section 32 of the Act sets out the obligations for a Section 32 statement. Not all of these obligations will apply to every property. They are as follows:
• Section 32A: Financial matters: rates, taxes, charges and outgoings
• Section 32B: Insurance: building insurance at the purchaser’s risk, and owner builder insurance
• Section 32C: Land use: easements, covenants and other restrictions, and bushfire-prone area information
• Section 32D: Notices, orders and proposals of a public authority
• Section 32E: Building permits issued in the previous seven years
• Section 32F: Owners corporation information
• Section 32G: Growth areas infrastructure contribution
• Section 32H: Services that are not connected
• Section 32I: Title documents and evidence of the right to sell
• Section 32J: Attaching certificates, notices and other documents
What do vendors need to do?
The Section 32 statement must be provided to any interested party before the purchase contract is signed. Usually, this statement is prepared prior to listing the property on the market. If this is achieved, a prospective buyer will be able to access the statement as soon as they are interested.
Preparing the statement early on ensures that there are no delays in the sale process, and this may increase the speed and efficiency of the sale.
It is likely that vendors will need to provide documentation to assist with the drafting of a Section 32 statement. This will include details regarding the condition of the property as well as documents relating to the mortgage, title, rates, body corporate fees, easements, or restrictions.
It can be useful for vendors to locate the previous Section 32 statement for the property, to assist with document retrieval. It is imperative that all information provided in the Section 32 statement is accurate. The Vendor will then need to sign the statement to ensure you are aware of what it contains.
What happens if the Section 32 statement is defective?
Section 32K of the Act provides that a purchaser may rescind any contract for the sale of land where a vendor fails to provide the required information or provides misleading/false information. Buyers often have a lawyer review the Section 32 statement, so the statement must be compliant.
Contact Us
The Section 32 statement is a fundamental obligation of any sale of land.
At Western Conveyancing, we make the sale process clear and stress-free, providing expert advice and direct communication with our dedicated team. We also offer fixed, transparent pricing for the preparation of a Section 32 statement to guide you through this process.
Contact us today on (03) 8742 6794 or via email: [email protected]
