Section 32 Vendor Statement FAQ
What is a Section 32 Vendor Statement?
The Section 32 Vendor Statement (Section 32) must be prepared by, or on behalf of, the vendor, and served on any person who wishes to purchase the vendor’s property before the contract of sale is signed. There are serious consequences for the vendor if this procedure is not followed. On this page we begin with general FAQs about the Section 32 Vendor Statement, followed by more specific FAQs tailored to Purchaser and Vendors and how the Section 32 Vendor Statement affects each.
NOTE: For a detailed breakdown of the specific requirements of Section 32 see “Section 32 Explained – A Guide For Consumers or CLICK HERE
Vendors and the Section 32 Statement >>>
Purchasers and the Section 32 Statement >>>
Section 32 Searches and Certificates >>>
What is the Section 32?
A legal document
The Section 32 is a document provided by the seller of real estate (vendor) to an intending purchaser.
Its name comes from Section 32 of the Sale of Land Act, which requires a vendor to provide certain information to a purchaser BEFORE a contract of sale is signed.
In general terms, if the vendor fails to provide the information required by the Act before the contract is signed, the purchaser will be able to cancel the contract. Of course, there are exceptions to this rule, and purchasers should not assume that any “technicality” will allow them to end the contract.
Before a contract is signed is the best time to get legal advice from a qualified lawyer, as the opportunities to end the contract can be severely limited if legal advice is sought after the sale has been finalised.
In recent years, the information required in a Section 32 has been expanded and extended. Interpretation of the Section 32 requirements, particularly those relating to building works undertaken by an “owner-builder”, can be quite confusing. In addition, failure to comply with some of the rules can attract huge monetary penalties.
See What’s in the Section 32 for information on what is required in a Section 32
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Who prepares the Section 32?
It should be prepared by a lawyer
The Section 32 should always be prepared by a qualified lawyer. While this is not stated in the Sale of Land Act, the fact that it is a legal document means that a vendor must be given competent legal advice by a qualified lawyer in order to understand the responsibilities associated with the preparation of the Section 32.
Criminal offences in Section 32
For example, a vendor who knowingly or recklessly provides false information, or fails to provide ALL of the information required by Section 32 commits a CRIMINAL OFFENCE, and can be fined.
A vendor who commits a criminal offence because they were not properly advised by a real estate agent or conveyancer (both of whom routinely prepare the Section 32 for uninformed consumers) will be told by the estate agent or conveyancer “I am not allowed to give you legal advice, because only a qualified lawyer can give legal advice or perform legal work”.
How the Section 32 is provided
Usually, the Section 32 is prepared by the vendor’s lawyer, and delivered to the real estate agent. The agent then makes the Section 32 available to purchasers.
Where the vendor is selling without the involvement of an agent, the vendor’s lawyer will usually provide the Section 32 direct to the purchaser, or send it to the purchaser’s lawyer. These days it is most common for the Section 32 to be combined with a blank contract, and provided electronically.
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How long does it take to prepare the Section 32?
These days it is possible for us to complete a Section 32 Vendor Statement within 24 hours, or even on the same day as we receive client instructions. Of course, this depends on the ability of the local council and other authorities to processes and electronically deliver their search certificates. However, because of the searches involved in obtaining information about some properties, particularly where there is an owners corporation involved, a Section 32 can take a weeks or more to complete.
If the vendor is an owner-builder there may be a legal obligation for the inclusion of an Owner-builder Defects Report in the Section 32, and possibly Home Owner Warranty Insurance.
In some regional areas it can also take longer if there are grazing or water drawing licences involved, as these must also be disclosed in the Section 32.
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Who must sign the Section 32?
Statement by the vendor
The vendor is the only person who is required to sign the Section 32. The vendor may sign personally, or through their legal representative.
Most real estate agents will tell purchasers that they too must sign the Section 32.
This is not necessary. It is only to protect the estate agent. By having the purchaser sign the Section 32 the agent is able to prove that a copy of the Section 32 was delivered to the purchaser BEFORE the contract was signed. This is the one and only reason why purchasers are asked to sign the Section 32. But be careful, as we have seen numerous instances where the Section 32 was delivered after the contract was signed with both the contract and the Section 32 being back-dated by the real estate agent to make it appear that the Section 32 had been delivered before.
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Can digital signatures be used to sign a Section 32?
The simple answer is yes. Electronic and digital signatures have been found to be acceptable for the signing of both the Section 32 Vendor Statement and the Contract of Sale, so long as it is done correctly.
A distinction needs to be made between a digital signature and an electronic signature. A digital signature involves an encryption device and implies the existence of an authentication network standing behind the signature. This is the process used in electronic conveyancing for execution of the transfer and involves a trusted third party signing the transfer of land on behalf of the parties. This no doubt satisfies the requirements of the Statute of Frauds.
An electronic signature, on the other hand, stands alone and acts purely as a representation of the signature of the party. It is not made by hand, as is the case of a traditional signature, but rather is formed by the placing of the hand on a key, or even conceivably by voice recognition software generating the appropriate keystrokes.
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When must the Section 32 be provided?
Pre-contract disclosure
The Section 32 must be provided to a purchaser BEFORE the contract is signed.
Sometimes an agent will have the purchaser sign a contract first, and include a special condition in the contract stating that the sale is subject to the vendor providing the purchaser with a copy of the Section 32. In such circumstances the sale is fatally flawed, and the purchaser is entitled to cancel it.
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What is in the Section 32?
The following is a list of the basic information found in a Section 32. Further information may be required -it depends on the property being sold. (Remember, legal advice from a qualified lawyer should always be sought regarding the information contained in the Section 32, and what information SHOULD be included).
Basic information in the Section 32:
- Statutory warnings to the purchaser
- Vendor’s details
- Title details
- Information regarding building permits issued in the past 7 years
- Particulars of owner-builder warranty insurance
- If the vendor is the owner-builder who completed building works there should be a written inspection report (which lists any defects) in the Section 32
- Particulars of any mortgages or “charges” over the land (i.e. debts charged against the land)
- Information regarding covenants, easements and any other restrictions on title (whether or not they appear on the title)
- Planning information, particularly where zoning restricts land use
- Information regarding outgoings payable by the owner of the property
- Disclosure of any notices or orders issued by the authorities, regarding fencing, road-widening, sewerage etc…
- If there is access to the property by road
- Information on services connected to the property
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But what is NOT there?
Remember, it may appear safe to receive a Section 32 that discloses no adverse information about the property – but the question remains: what SHOULD be there, but is NOT there?
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When does a Section 32 expire?
Vendors often ask, “How long does a Section 32 Vendor Statement last?” The industry rule of thumb is that a Section 32 remains valid for 3 months, and then it should be updated. However, the situation is not really that simple.
The Section 32 will usually contain a set of certificates (also known as Section 32 “searches”) obtained from various authorities, including the local council, water authority, State Revenue Office, VicRoads etc. These certificates confirm or “certify” as correct the information they contain, giving a person who relies on this information certain rights if the information is incorrect. These certifications usually have a stated time limit of 90 days, which is where the 3 month “lifespan” of the Section 32 comes from.
So, while there is no expiry date per se, the information in the Section 32 may be regarded as stale after 90 days. Of course, this does not mean that the Section 32 is invalid, but it does mean that information contained in the certificates should be not relied upon without further verification. A vendor is always advised to check the Section 32 statement just before entering into a contract of sale, to ensure that the information it contains remains complete and correct as at the day of sale. If there is any uncertainty about the information being complete or accurate then the Section 32 should be updated, either by amending or by adding or replacing certificates.
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What if the Section 32 is defective?
Criminal offence
As discussed above, it is a criminal offence for a vendor to deliberately or recklessly provide false information, or to fail to provide all of the required information. A person found guilty of this is liable to a penalty of 50 penalty units.
Cancellation of the contract
Where a vendor has failed to comply with the provisions of Section 32, a purchaser may be entitled to end the contract at any time, up until the day of final settlement. This can result in huge costs to a vendor. The vendor may still have to pay a full commission to the estate agent, then a second commission if the property is to be sold again, plus legal costs, plus the cost of the purchaser’s loss.
Of course, there are exceptions. A mere technical breach may not necessarily result in cancellation of the contract. Legal advice should be sought before assuming anything with regard to breaches and remedies relating to Section 32 of the Sale of Land Act.
Misrepresentation and Trade Practices legislation
It is also possible that a dissatisfied purchaser of real estate may be able to take action for misrepresentation or for breaches of the Trade Practices Act or the Fair Trading Act.
There may also be other specific remedies available where the agent has engaged in improper conduct in order to bring about the sale.
Legal advice required
Of course, the details of each case must be considered to determine if there has been a breach, who is responsible for the breach, and what remedies may be available. Legal advice from a qualified lawyer is advised before any assumptions are made about a purchaser’s ability to end a contract on the basis of a breach of Section 32.
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How to read the Section 32
Introduction
The problem with a Section 32 Vendor’s Statement can be not so much what it does contain, but what it SHOULD contain.
When reading a Section 32, the purchaser should approach from 3 levels:
- What does the Section 32 contain?
- Are the contents of the Section 32 accurate?
- What is missing?
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WARNING: Have us check the Section 32 for you!
The following information is of a general nature, and alerts consumers to the most basic of matters to be checked.
As a law firm, we must advise that it is dangerous for a purchaser to check a Section 32 Vendors Statement themselves.
It is best for a purchaser to have a qualified lawyer check the Section 32, and draft the contract of sale on the purchaser’s behalf. We invite all purchasers to use our
pre-purchase contract checking and advice service!
Who is selling, and are they entitled to sell?
The vendor’s name/s will be included in the Section 32. But it is often the case that the person selling the property is not actually the owner of the property.
It is important to check that the person selling the property is entitled to do so. The first document to check is the Certificate of Title. If the names appearing on the Certificate of Title are different to the vendors, then further checks are made to verify the vendor’s right to sell. There may a Power of Attorney, or a Grant of Probate included in the Section 32. If not, then further investigations will be required.
Remember, many Section 32s are prepared by unqualified conveyancers who are not aware of the investigations needed to ensure that the vendor is entitled to sell, or the legal documents required to give the vendor authority to sell.
What is being sold, and does it measure up?
The Section 32 will also identify WHAT is being offered for sale.
You may have been shown a block of land by the agent, but is it the same block of land described in the Section 32? What if the agent has given you the wrong Section 32?
The Certificate of Title contained in the Section 32 will include a detailed description of the property for sale. In most cases the Section 32 will reference a Lot, and the Plan of Subdivision on which the Lot appears.
It is important to confirm that the land “on the ground” corresponds with the Lot described in the Section 32. This means checking that the dimensions of the Lot, as described in the Plan of Subdivision, are the same “on the ground” and that the fences are standing on their correct boundaries.
Where the property for sale is a unit, care should be taken to identify any carparks associated with the unit. It is often discovered that a carpark has its own Certificate of Title, and this has been overlooked when the Section 32 was prepared!
Quality issues
- Can a panel shop open next door?
- Is there a right to use the lane to access the garage?
- Is gas available in the area?
- Was the extension done by an owner-builder?
- Have there been any unauthorised building works?
These are just some of the “quality” issues confronting a purchaser. Most of these can be answered in the Section 32. As long as the Section 32 is true and complete, there will, at least, be some indication of where further enquiries can be made.
Again, legal advice and assistance from a qualified lawyer can alert a purchaser to what SHOULD be in the Section 32, and what further enquiries should be considered. Please click on the link below for further information.
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Vendors and the Section 32 Statement
Why is the section 32 vendor statement important for the seller?
The section 32 vendor statement is required by law and failure to provide it may give the buyer the option to walk away or invalidate the sale entirely. The statement is a disclosure document that contains a range of attachments that provide information to the buyer about the condition of the property. Such information includes title search, statutory warnings, mortgages as well as other charges on the property and zoning requirements.
Being a compulsory document, it is in the interests of the seller to ensure the section 32 vendor statement is complete and accurate. A section 32 vendor statement that meets the requirements of the law will bind the buyer to the purchase and will give the vendor the basis to retain the total deposit should the buyer wish to rescind the contract after the cooling off period.
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When must the section 32 vendor statement be provided?
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What happens if the section 32 vendor statement is found to be defective?
The bottom line is, where a section 32 vendor statement is found to be defective, the buyer may be entitled to end the contract without any financial penalty. Whether the defect is enough to constitute ending of the contract is still a question that needs to be carefully considered. If you are the seller and the buyer is of the view that the section 32 vendor statement is defective and wishes to rescind the contract, you may want to seek legal advice as there are exceptions to the situation.
Where you as the seller have given incorrect information intentionally, this can actually constitute a criminal offence. So in providing the section 32 vendor statement, you need to ensure that the information you provide is also accurate and not deliberately misleading.
Deliberately providing incorrect information can also open you up to civil claims from the buyer under the Competition and Consumer Act (previously known as the Trade Practices Act) or the Fair Trading Act.
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What are the steps to draft a section 32 vendor statement?
Due to the risk of a defective section 32 vendor statement, it is advisable to get a professional to prepare it for you. A lawyer or conveyancer will be familiar with the requirements of a section 32 vendor statement and will have their respective checklists to ensure compliance with the legislation.
The time it takes to prepare a section 32 will depend on the particular property and the various reports that pertain to its condition and state.
As the seller, any information you have in relation to the status or condition of the property will be helpful when preparing the section 32 vendor statement. Before starting the drafting of the section 32 vendor statement, gather any documents relating to the mortgage, charges or outgoings of the property. This will speed up the process to some extent. Where a qualified lawyer or conveyancer is preparing the statement for you, they may be able to find the information through searches and inquiries.
Nevertheless, it will be helpful if you are able to provide an honest condition of the property through documentation.
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How do you read a section 32 vendor statement as a vendor?
As the vendor, you need to ensure that the documents you attach as part of the section 32 vendor statement are accurate and the buyer will be able to access them. There are many factors that will not be apparent during an inspection alone so you should ensure your section 32 vendor statement provides clarity and covers aspects that the buyer must know about under the law. For instance, services that are connected to the land, zoning particulars, government proposals and so on.
The section 32 vendor statement is also beneficial for the seller as it acts as a safeguard once the cooling off period ends so the seller is able to retain the deposit where the buyer decides to not go through with the sale.
You will need to sign the section 32 vendor statement so ensure you are aware of what it contains..
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Do I need a lawyer to prepare the section 32 vendor statement?
Due to the critical nature of the section 32 vendor statement and its legal consequences, it is advisable to request a lawyer to prepare it. Where a section 32 vendor statement is found to be defective, there can be serious consequences to the sale and the buyer may in fact be able to walk away. For these reasons, it is best to engage a professional from the outset.
Lawyers and conveyancers prepare section 32 vendor statements day in and day out so are well positioned to draft an accurate document without taking too much time. Having a lawyer or conveyancer draft the document will also allow you to ensure you understand your obligations as the seller and feel satisfied that all relevant requirements have been met.
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Do I still need a section 32 vendor statement in a private sale?
Regardless of whether you use a real estate agent or not to handle the sale, you are required by law to provide a section 32 vendor statement. So it is best to engage a lawyer from the outset and start the process. Any buyer worth his or her salt will ask for the section 32 vendor statement. You want to be prepared and ensure a good sale is not hindered by lack of organisation.
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What if the estate agent wants to change something in the Section 32 vendor statement?
Under no circumstances should a estate agent be permitted to tamper with the Section 32 statement. If the estate agent or anyone else believes that a documents should be added to, or removed from, the Section 32 it is most important that legal advice is obtained. In any case, the Section 32 statement may have to be resigned by each vendor before being presented to an intending purchaser.
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How can I make quick changes to the Section 32 vendor statement?
If there is a need to make a quick change to the Section 32 statement (for example the adding of a middle name of a vendor or the correction of a typographical error, it is a simple matter of ruling a neat line through the word or phrase to be amended, writing in the correct word or phrase, and then having each vendor initial the change. Of course, it is best to have your legal representative check and confirm if this is at all possible in the circumstances.
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How can I digitally sign a Section 32 vendor statement?
Yes, it is quite acceptable for the signing of a Section 32 statement to be done by way of digital or electronic signature, as stated at Section 32 of the Sale of Land Act (1962).
At Lawyers Conveyancing we use the most popular form of electronic signature, being that provided through DocuSign.
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Must I disclose if my property is ‘stigmatised?
It is not yet a requirement that a property must be described as a stigmatised property in the Section 32 Statement, but it is likely that Section 32 of the Sale of Land Act (1962). will be amended in the future to make such disclosure compulsory.
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Purchasers and the Section 32 Statement
Why is the section 32 vendor statement important for the buyer?
Upon inspecting a property, there are many aspects that are not immediately or obviously apparent. As such, the law requires the seller to disclose certain matters to the buyer so that they can make an informed decision about the purchase of the property.
The section 32 vendor statement is required by section 32 of the Sale of Land Act and must disclose all particulars that may affect the property in question.
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When can the buyer expect the section 32 vendor statement to be provided?
The section 32 vendor statement must be provided to the buyer before signing of the contract of sale. Good practice is to provide the statement when an interested buyer approaches the agent.
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What documents does the seller not need to provide in a section 32 vendor statement?
It is a common misconception that council rate notices and Land Tax certificates are mandatory inclusions, but this is not so. See below for further explanations regarding certificates and searches and the significance of particular certificates.
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What happens if the section 32 vendor statement is missing certain documents?
The requirement to provide all documents required by section 32 is mandatory and there are no ifs or buts about it. The seller must provide all relevant documents. As the buyer, you want to ensure that the section 32 is complete and not defective. In the event that the section 32 vendor statement is missing certain documents, you can make further enquiries. Essentially, a defective or incomplete section 32 vendor statement gives the buyer the right to walk away from the purchase.
However, simply because a section 32 vendor statement is incomplete, you may not want to walk away. You can make enquiries and request that the seller provide you the missing documents. Having a qualified lawyer assist you in reviewing the section 32 vendor statement will ensure that you make an informed decision with all documents at hand.
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What if the seller refuses to provide a section 32 vendor statement?
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What happens if the section 32 vendor statement is found to be defective?
As the buyer, any defect in the section 32 vendor statement means you will be able to leave the contract without any financial penalty. But you should speak to a lawyer first before you decide to walk away as there are exceptions to the situation. In fact, whether the defect is enough to constitute ending of the contract is still a question that needs to be carefully considered.
On another note, where the seller has given you incorrect information intentionally, this can actually constitute a criminal offence. This may open up civil claims for you as the buyer under the Competition and Consumer Act (previously known as the Trade Practices Act) or the Fair Trading Act..
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How do you read a section 32 vendor statement as a buyer?
As the buyer, you need to ensure that the documents that are attached as part of the section 32 vendor statement are accurate and you can easily access them. There are many factors that will not be apparent during an inspection alone so you should ensure the section 32 vendor statement provides clarity and covers aspects that you want to know about under the law. For instance, services that are connected to the land, zoning particulars, government proposals and so on.
The last thing you want is to sign the contract and put down your hard-earned deposit, only to learn that there is a massive issue with the property. So read the details and if you think you’re missing something from the section 32 vendor statement, ask the seller. Because pursuant to the law, the seller must provide you with all relevant documents required by section 32 of the Sale of Land Act of Victoria.The copy of the title document is one of the very important documents that make up the section 32 vendor statement and is evidence that the seller in fact has the legal authority to sell the property. The title document will also contain any mortgages or charges over the property. If the property is being rented out, the section 32 vendor statement must also contain a copy of the existing lease agreement..
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Do I need a lawyer to look through the section 32 vendor statement?
If this is your first home purchase or even if you have bought properties before, it is always advisable to obtain legal advice from a lawyer, especially to review the section 32 vendor statement. Buying a property is a big commitment and if you are unfamiliar with the legislative requirements, you may commit yourself to a contract that you don’t completely understand.
By engaging a qualified lawyer well-versed in property matters, you will be able to ensure that the seller has provided all appropriate documents and you are able to make an informed decision of whether you wish to continue with the purchase and hand over the deposit.
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What other documents are important when buying a property?
The more information the better. Luckily, the section 32 vendor statement will provide you with a number of documents that will give you a more thorough understanding of the property and its state.
In terms of other documents that are important when buying a property, there are many. To give you an understanding of what they may, here is an outline so you can watch out for these elements in the section 32 vendor statement.
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Outgoings
Legally, the seller is required to provide you a ballpark figure of the outgoings associated with the property. This may include any rates, taxes or charges. As the buyer, this will ensure you are able to allow for the additional monies.
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Zoning certificate
To ensure you can use the property for the purpose you wish to use it, the section 32 vendor statement must also include a zoning certificate. If you are looking to buy a residential property, make sure you confirm on the zoning certificate that the property is fit for residential purposes.
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Building permits
These permits are important where renovations or other work has been carried out within the property in the past seven years. The works may be complete, taking place or about to take place. In any event, you need to check the section 32 vendor statement to confirm that the works were in fact approved and building permits were obtained.By ensuring you have the relevant building permits, you can be rest assured that the works are being carried out legally and if you are asked questions later by council or other similar departments, you have the paperwork to show the works were carried with the appropriate permissions. At the end of the day, the onus will be on you as the new owner.
If you find that these building permits are missing, you have the right to make additional enquiries from the seller as this is a legal requirement to provide.
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Owners corporation certificate
A body corporate certificate must be included in the section 32 vendor statement where the property you wish to purchase is an apartment, unit or townhouse. Also known as a strata report, the Owners Corporation certificate will provide you with a snapshot of the communal outgoings for the upkeep of the complex. The certificate will also include any council and water rates.
Special rules concerning the use of the property is another aspect of the certificate including whether pets are allowed, protocol as to hanging of laundry on balconies and what type of renovation works are allowed to be undertaken.Meeting minutes of Owners Corporation meetings will also be included as well as any future plans for refurbishment of the complex. An important part of the certificate that you should pay attention to is whether there is enough funding to undertake the proposed works. In the event that there isn’t, owners within the complex may be required to increase their body corporate fees.
A key document when buying into a complex, be sure you pay close attention to the body corporate certificate.
There are many other documents that also form part of the section 32 vendor statement and as the buyer, you need to review them all carefully. Consulting with a lawyer to undertake the review is highly recommended.
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How does the Section 32 vendor statement work in private sales?
Any property that is being sold in the state of Victoria must be accompanied by a section 32 vendor statement. Even if no real estate agent is involved, the seller must still provide a section 32 vendor statement. If one is not provided, ask for it. And if the request is declined, it is better you not proceed with the sale, no matter how much you may love the property.
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Section 32 Searches and Certificates
While there are only a few mandatory inclusions by way of specific documents required in the compilation of a Section 32 statement, it is most common to disclose some information by way of searches and certificates obtained from various government departments and instrumentalities. This is because the information these certificates contain is often unknown to the vendor, and the inclusion of certificates is the only way that full and proper disclosure as required under Section 32 of the Sale of Land Act (1962) can be achieve.
Some of these certificates are listed and described below:
Why is the section 32 required to have a Register Search Statement?
Section 32I of the Sale of Land Act 1962, sets out a the documents that must always be attached to a Section 32 statement. Section 32I (a) states, “in the case of land under the Transfer of Land Act 1958 , a copy of the Register Search Statement and the document, or part of the document, referred to as the diagram location in the Register Search Statement that identifies the land and its location“.
The register search statement is also known simply as the title search.
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What is the Land Information Certificate?
The Land Information Certificate provides information about valuations of the property, the amount of rates charged and arrears or interest if applicable. The certificate is required so that the correct settlement can be made.
The relevant city council must issue Land Information Certificates on application. When reading a Land Information Certificate it is important to note the issues that are not addressed by the certificate. Most Land Information certificates list these, and they will common exclusions are information on land slip, mining subsidence, flood levels and the like.
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What is a VicRoads Certificate?
In addition to other details and information, the Vendors Statement is required to include information as to whether VicRoads (the Roads Corporation) has any approved proposals for works requiring the purchase or compulsory acquisition of land. The VicRoads certificate states where or not there are any approved proposals that may affect the land being sold.
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What is an Owners Corporation Certificate?
All Owners Corporations in Victoria are required to prepare and supply a certificate within ten business days to anyone who applies in writing and pays the relevant maximum fee for each certificate. An owners corporation certificate must include:
- current quarterly or annual fees for the lot;
- the date to which fees have been paid;
- total unpaid fees or charges for the lot;
- the date that special fees or levies were approved and the due date for payment;
- details of repairs, maintenance or other work that may incur charges additional to those already budgeted for or approved;
- details of insurance cover for buildings and common property;
- whether the owners corporation has resolved that members may arrange their own insurance and the date of this decision;
- a total of funds held by the owners corporation;
- whether the owners corporation has any other liabilities in addition to those listed above, and the details of those liabilities;
- details of any contracts, leases, licences or agreements affecting the common property, such as the leasing of car parking spaces or garden areas;
- details of any agreements to provide services to lot owners, occupiers or the public, such as swimming pool, gym, concierge etc;
- details of any outstanding notices or orders served on the owners corporation in the past 12 months;
- details of any legal proceedings involving the owners corporation and any circumstances likely to lead to proceedings;
- whether the owners corporation has appointed or has resolved to appoint a manager and, if so, the name and address of the manager; and
- whether an administrator has been proposed or appointed for the owners corporation.
Although the owners corporation certificate is a required inclusion, off-the-plan sales of units and apartments are something of an exception, as in these cases the owners corporation will not actually come into existence until the plan of subdivision is registered.
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What is the Water Information Statement?
The Water Information Statement provides information related to the property regarding water and sewerage service charges and estimated consumption up until the requested settlement date. This statement is to detail any encumbrance affecting the land (excluding those shown on land titles), works required to be carried out, matters outstanding and any relevant rate or change.
The Water Information Certificate is regarded as an essential inclusion in any Section 32 statement because the information it contains can make the difference between a purchaser’s decision to buy or to avoid a particular property. A common example is where the Water Information Statement discloses that a property is sewered by a “combined drain”, as this may mean that a developer intending to build units on the purchased property may be restricted from building as many units as anticipated. If such information is not provided by a vendor the purchaser may have the right to cancel the contract.
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What is the Land Tax Clearance Certificate?
The Land Tax Clearance certificate protects a purchaser from any outstanding land tax liability by a previous owner. It does not provide any protection to the owner of the land. Land tax is the first charge on the title to the land to which it relates and must be paid before ownership can change.
The certificate may be issued as ‘clear’ if:
- the land is not liable or is exempt from land tax;
- the tax has been paid;
- the Chief Commissioner is satisfied payment of the tax is not at risk;
- the owner of the land failed to lodge a land tax return when it was due and the liability has not been detected when the certificate was issued.
A purchaser’s legal representative will always purchase a Land Tax Clearance certificate, as Land Tax is an adjustable outgoing to be apportioned between vendor and purchaser on a pro rata basis as at settlement day.
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What is the Due Diligence Checklist?
There is a range of issues that may affect a property and impose restrictions or obligations on purchaser. This Due Diligence Checklist is designed to assist a purchaser to identify whether any of these issues will be of concern.
All vendors or estate agents must make this checklist available to potential buyers of homes or residential property.
Sellers or estate agents must:
- ensure copies of the due diligence checklist are available to potential buyers at any open for inspection;
- include a link to the Consumer Affairs Victoria webpage (consumer.vic.gov.au/duediligencechecklist); or
- include a copy on any website maintained by the estate agent or the seller (if no estate agent is acting for the seller).
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