Section 32 Statement or Vendor’s Statement refers to one of the significant legal documents necessary in the property transactions in Victoria, Australia.
It comprises crucial information relating to the property that is being sold, and it allows the buyers to do a full due diligence into their consideration for purchase.
Whether you’re a buyer or a seller, understanding the contents and implications of this statement is vital for a smooth property transaction.
What Is the section 32 vendor statement?
The Section 32 Vendor Statement is a legal disclosure document required by Section 32 of the Sale of Land Act in Victoria. It contains information about the property’s title searches, restrictions, and other key elements that may impact the buyer’s decision to proceed with the transaction.
This statement ensures that sellers meet their disclosure requirements, providing transparency about the property. Failing to provide an accurate and complete statement can lead to legal consequences, including the potential cancellation of the contract.
Why Is section 32 vendor statement important?
For Sellers
- Legal Compliance: The sellers have to legally provide a property disclosure through the Section 32 Statement. Otherwise, the sale becomes null and void.
- Binding Contract: A valid Vendor’s Statement makes any contract enforceable, even if, after the expiry of the cooling-off period, the buyer withdraws from it.
- Deposit Security: On breach of contract by buyer post cooling-off period, the seller is liable to retain the deposit.
For Buyers
- Informed Decision: The statement provides the essential information about easements, covenants, and other encumbrances that affect the individual property.
- Legal Protections: An incomplete statement or a defective one is enough for the buyer to abandon the contract at no cost.
- Avoid Surprises: Important information, including body corporate fees, rates, and taxes, as well as property defects, assist buyers in anticipating any potential costs and/or headaches.
What does a section 32 vendor statement include?
The Vendor’s Statement comprises several critical documents and details.
Below is an outline of the main inclusions:
| Category | Details |
|---|---|
| Title Document | Proof of ownership and legal authority to sell, including encumbrances like mortgages and other claims on the property. |
| Rates and Taxes | Information on outstanding council rates, water charges, and land tax obligations. |
| Zoning Certificate | Details on whether the property is zoned for residential or commercial use, helping buyers understand permitted activities. |
| Easements and Covenants | Restrictions on property use or rights granted to third parties, such as access pathways or building restrictions. |
| Building Permits | Evidence of approval for renovations or additions carried out within the past seven years. |
| Body Corporate Information | Applicable for apartments or units, including body corporate fees, meeting minutes, and financial statements of the Owners Corporation. |
| Outstanding Debts | Details of any unpaid debts linked to the property, ensuring buyers are aware of financial liabilities. |
Key legal obligations
For Sellers
- Ensure all required documents are included and accurate.
- Provide the Section 32 Statement to potential buyers before the contract is signed.
- Hire Best Conveyancer to ensure full compliance with legal requirements.
For Buyers
- Carefully review the property disclosure for potential issues.
- Confirm that all relevant documents, such as title searches and zoning certificates, are included.
- Seek legal advice to identify any missing or misleading information.
What happens when a section 32 vendor statement is not there?
For property sales within Victoria, a Section 32 Vendor Statement is a mandatory document. Without it:
For Sellers
- Legal Consequences: The non-providing of a Section 32 Vendor Statement constitutes an illegal act according to the Sale of Land Act, and makes it unlawful to advertise or put the property up for sale.
- Reduced Buyer Confidence: This is the kind of situation that gives buyers a red flag, making them less likely to continue in the interest of the property.
- Delay in Sale: Inevitably, the absence of a prepared statement will result in significant delays, especially if a buyer is requesting immediate access before proceeding.
For Buyers
- Right to Walk Away: The buyer is not obliged to go ahead with the vendor in the transaction if he has not received a copy of the Vendor’s Statement.
- Risk of Hidden Issues: Buyers will likely unknowingly purchase properties, with covenants, encumbrances, other legal claims unsatisfied without this document.
- Legal Recourse: Buyers can consult lawyers to know their legal representations in case of deficiency or absence of Section 32 Statement.
Common issues with the section 32 vendor statement
Incomplete or Defective Statements
- Missing documents, such as insurance details or planning approvals, can render the statement invalid.
- Buyers may terminate the contract without penalty if the statement is deemed incomplete.
Misrepresentation
- Sellers providing false information, whether intentionally or not, may face legal consequences under the Competition and Consumer Act or Fair Trading Act.
Failure to Disclose Material Facts
- Omitting significant details, like property defects, can result in disputes and potential contract termination.
Why is legal support essential?
If you’re a buyer or seller, it would be advisable to involve a professional in the procedures involved in the preparation of the Section 32 Statement.
For Sellers
- A conveyancing expert in Melbourne will ensure that all legal requirements have been met so that the seller is protected from disputes or penalties.
- It can help you to find and verify necessary documents such as easements, covenants, and building permits for accuracy.
For Buyers
- A lawyer or conveyancer can check the Vendor’s Statement for inaccuracies.
- They provide valuable insights into the implications of disclosure requirements, protecting your investment.
Get expert help for your section 32 vendor statement
If you plan to buy something or sell your property, the Section 32 Vendor Statement will be the most important aspect of property transactions. Let our experienced team at Eagle Peak guide you through this process in confidence. The process ranges between ensuring legal compliance and detailing every item; we provide trustworthy support for all of your conveyancing needs. Call us today at 0412 001 874 for reliable assistance and hassle-free property transactions!
