When inquiring about a property you are interested in and/or considering purchasing it, you are typically provided with a Contract of Sale along with a document entitled “Section 32” for you (and/or your lawyers) to review and consider prior to entering into the agreement.

A Section 32 is intended to allow you, a prospective purchaser, to complete your due diligence and make an informed decision regarding your potential purchase of the property being sold.

That being said, a Section 32 usually contains close to 100 pages (depending on the property) – most of which our clients struggle to make sense of.

In light of this, we have summarised what a Section 32 includes and why prospective purchasers should make sense of it prior to purchasing the property that they are interested in.

What is a Section 32?

A Section 32 is a mandatory document that discloses information that may affect the value of the land being sold in a property transaction pursuant to the Sale of Land Act 1962 (VIC) (the “Act”).

Section 32 (1) of the Act provides that a vendor under a Contract for the sale of land must give to the purchaser, before the purchaser signs the Contract of Sale, a statement signed by the vendor that contains the matters and attaches the documents specified in Division 2 of Part II of the Act (outlined below).

What will you find in a Section 32?

A Section 32 is made up of a number of different documents, which typically includes:

  • the vendor (seller)’s details (i.e., the vendor’s contact number, address and other particulars of the vendor).
  • a copy of the Register Search Statement to confirm the title details, the registered proprietor(s), any encumbrances, caveats, notices, and the street address of the land being sold.
  • a copy of the Plan of Subdivision detailing the boundaries of the lot and a description of any easements, covenants, or restrictions affecting the land.
  • confirmation of the services (water, sewerage, gas, electricity, telephone) that are connected to the land.
  • a planning statement – specifying the name of the responsible government authority, the planning zone and any overlays affecting the land, and the name of the planning scheme.
  • certificates from the relevant authorities including, but not limited to, the local Council, the local Water Authority, VicRoads, State Revenue Office, and the Owner’s Corporation (if applicable). These certificates may outline any outgoings, levies, notices, permits, insurance or proposed plans that may affect the land.
  • any building permits issued under the Building Act 1993 (VIC) in the preceding 7 years. If required, an occupancy permit, final inspection, defects report, or insurance may be included; and
  • a Due Diligence checklist (the checklist aims to help identify whether any of the issues will affect the prospective purchaser).

Why is a Section 32 important?

Not all issues that affect a property are immediately or obviously apparent on the surface. For example, at an open inspection of a property, it may not be visible that an easement, covenant, or restriction is affecting the land. That’s why the law requires the vendor to disclose certain matters to prospective purchasers so that they can make an informed decision about the property they are considering purchasing.

What does Section 32 not cover?

Section 32 does not necessarily cover every piece of information about the property.

For example, the Section 32 will not include information on whether the dwelling complies with building regulations or the accuracy of the measurements on the title. That means as a prospective purchaser, you will have to make these investigations yourself (i.e., such as contacting the local Council and/or engaging a qualified expert to conduct an inspection).

If you have any questions concerning the above, please don’t hesitate and contact the Arro Property team today.

Alternatively, to get started on your journey to buying your property, please send a copy of the Contract of Sale along with the Section 32 for us to commence our review and to advise you on your legal obligations under the Contract.

We look forward to hearing from you!