August 31, 2023

Section 32 Vendor Statements: Your Complete Guide

A Section 32 statement, also known as a Vendor Statement or a Statement of Disclosure, is a legal document Sellers must give to prospective Buyers prior to signing the contract of sale. It contains important information potential Buyers should know before proceeding with their property purchase.

Providing a complete Section 32 statement is a mandatory obligation on the Vendor (the party selling property). Failing to do so may invalidate the contract and can also be a criminal offence.

What Has To Be Included In The Vendor’s Statement?

The Section 32 statement is comprised of several different documents containing information about the property. The exact requirements for the contents of the statement can be found in section 32 of the Sale of Land Act 1962 (Vic), which provides:

32 Statement of matters affecting land being sold

(1) 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.

(2) For the purposes of subsection (1), a vendor may sign the statement to be given to a purchaser under this section by electronic signature.

The documents and information required include;

Vendor Information

The Vendor’s name, address, number and other details should be listed on the statement.

Title Document

The title document will reveal the owner of the property and important details such as any registered easements, covenants, charges, mortgages or other liabilities or restrictions on the property.

Certificates Or Searches From Relevant Authorities

The certificates or searches required vary depending on the property, are obtained from the responsible government authority, and usually include the following;

Water Information Statement

The Water Information Statement contains information about water usage and and charges up to settlement. It should also disclose any relevant encumbrances related to water or sewerage on the property, such as works to be carried out or overdue rates and charges.

Land Tax Clearance Certificate

A Land Tax Clearance Certificate shows whether there is any land tax payable on the property. It is critical that Buyers obtain this information, as the liability passes to them on settlement.

VicRoads Certificate

The VicRoads Certificate provides information about whether there are any approved proposals from VicRoads that may effect the property (such as a compulsory acquisition).

Land Information Certificate

The Land Information Certificate is issued by the Council in which the property is situated and contains information about the rates payable on the property and the valuation of the property.

Owners Corporation Certificate

An Owners Corporation Certificate should be included if the property is a unit or apartment. This will disclose information about the outlays involved in the upkeep and maintenance of the common property.

Insurance Details

The Vendor should set out any insurance over the property if the property is to be at the Buyer’s risk prior to settlement.

Owner Builder Warranty Insurance

If the Seller has carried out works on the property as an owner-builder, there may be a requirement for the inclusion of the details of their owner builder warranty insurance. If the work has been completed, there should also be a written inspection report and owner builder defects report.

Building Permits

Building permits are required to show whether any work has been done on the property within the previous seven years, and whether these works were done (or are currently being done) with the correct building permits.

This is not an exhaustive list of items to be included in the Section 32. For information about all relevant documents to be included in your Vendor’s Statement, please contact our office.

Who Prepares The Section 32 Vendor’s Statement?

A section 32 Vendor’s Statement is a legal document and should be prepared by the Seller’s legal representative.

The Vendor will need to sign the statement before it is provided to the Buyer.

When Should The s 32 Statement Be Provided?

The vendor’s statement must be provided to the Buyers prior to signing the sale contract. Real estate agents will usually provide a copy of the statement to a prospective Buyer on request.

Should The Buyer Have The Vendor’s Statement Reviewed?

It is critically important for the property Buyers to thoroughly review the vendor’s statement prior to their property purchase, as it will reveal important details that might not be obvious from a physical inspection.

It is recommended that the Buyer seek legal advice and have the vendor’s statement reviewed by the purchaser’s legal representative.

Do I Need A Section 32 Vendor Statement If It Is A Private Sale?

Yes, the law requires all Vendors to provide a Section 32 statement to prospective Purchasers regardless of whether they use a real estate agent.

How Long Is A Vendor Statement Valid?

A s 32 statement contains certificates from various relevant authorities (these are also sometimes referred to as ‘searches’), and typically remain valid for three months.

For this reason it is a good rule of thumb to regard the statement as out of date after 90 days. The Vendor should look over the statement prior to entering a contract of sale to ensure the information it contains is up to date, and to replace any certificates that have expired.

What If The Section 32 Is Defective?

A defective or incomplete Vendor Statement can have serious consequences.

If the statement is incomplete or contains wrong information, the Buyer may have the right to terminate the contract. Other legal consequences could include financial penalties, or other legal action being taken.

If the Seller has provided false or incomplete information in the section 32, and has done so knowingly or recklessly, this is a criminal offence.

If in doubt, you should seek legal advice to ensure your interests are protected at every stage of your property transaction.

More Questions

It is important to seek competent legal advice and engage a solicitor who specialises in conveyancing to prepare your Section 32.

If you have any questions about the Section 32 Vendor’s Statement or any other aspect of conveyancing law in Victoria, give one of our friendly, call one of our friendly, expert solicitors today.

Alternatively, you can head over to our quote page for an obligation-free quote.

The above is information of a general nature and is not legal advice.