What is a Section 32 Statement?

When buying and selling your home or your investment property in today’s market, it is important for vendors to be aware of their obligations when it comes to preparing their property for sale, and for buyers to understand what steps to take to protect their investment.

The Sale of Land Act 1962 defines the necessary requirements a vendor, someone selling their property, must meet, including relevant documents they need to provide to the Purchaser. The Act explains that “A vendor under a contract for the sale of land must give to a purchaser, before the purchaser signs the contract, a statement signed by the vendor that contains the matters and attaches the documents specified in this Division”, this is called a Section 32 Statement.

What is a Section 32 Statement?

A Section 32 Statement is a mandatory document, provided by a Vendor, to a purchaser, that discloses information about a property. Also known as the Vendor’s Statement, this document is required to be provided to prospective purchasers, allowing them to do their due diligence, in order to make an informed decision regarding the potential purchase of the property being sold.

What does a Section 32 contain?

A Section 32 contains detailed information about the property that may not be common knowledge or easily accessible were the property not on the market.

This includes:

• Copy of the Title
• Copy of the Plan of Subdivision
• Confirmation of the services (water, gas, electrical)
• Planning zoning and overlay which can restrict usage of the land.
• Certificates from relevant authorities showing financial obligations
• Building permits issued in the past 7 years on the property

Who prepares the Section 32?

A Conveyancer or Lawyer is able to prepare a Section 32.

Pre Contractual Advice

For the buyer, reviewing the Section 32 can be crucial. Getting legal advice from a lawyer can assist in ensuring the vendor has complied with the Sale of Land Act disclosure requirements and  any defects have been identified. This is to ensure a smooth conveyancing process or where things go wrong, to give the purchaser some options about progressing with an offer on the property.

Do you have to provide a Section 32?

Whether you use a real estate agent or conduct a private sale, you are still required by law to provide a Section 32. If a Vendor fails to do so, the purchaser is entitled to terminate the contact at any time and seek compensatory relief.

When must the Section 32 be provided?

A Section 32 must be provided by the vendor to the purchaser prior to entering into a Contract of Sale.

What is the difference between a Section 32 and a Contract of Sale?

A Section 32 is a document that provides information about the property. A Contract of Sale outlines the agreed terms between the vendor and purchaser to purchase of the property.

Should I get a Conveyancer to look at a Section 32?

It is highly recommended, due to the legal nature of the document, that you have a Property Lawyer review the Contract.  Keeping in mind that Conveyancers are not able to provide you legal advice in relation to the documentation.

How long does it take to draft a Section 32?

Here at Coulter Legal we advise clients to allow 10-14 days for the drafting process. We source certificates from the relevant authorities to ensure the information provided is accurate to the date of the document.  This timeframe is directed by the council and water authorities.  Not all law firms or conveyancers provide the same detailed information that we do, so some timelines may vary from business to business.  We believe it is crucial for you to have the more up to date and correct information.

Who needs to sign a Section 32 Statement?

As vendor, you will be required to sign the Section 32 Statement first to confirm the details within the document is true and correct.  The document is then signed by a purchaser accepting the details contained.

Is there an expiry date on a Section 32?

There is no specific expiry date to a Section 32 Statement.  A Section 32 Statement is valid up until the time the information alters.  Alterations normally occur each quarter for the new water service charge.   We recommend a Section 32 is updated every 3 months. Once this time elapses, the information has become outdated meaning certificates and information must be reordered and the information contained in the Section 32 updated.

How we can help

At Coulter Legal, we provide comprehensive services for all aspects of your sale or purchase, including reviewing Section 32 Statements and Drafting Section 32 Statements. Contact our office today on 03 5273 5273 to hear all about our affordable fixed fee rates.

Article by Sophie Kingston, Property & Development Legal Assistant.