What is Section 32?

Details like this will impact your decision when you’re choosing your new home. But with no legal requirement, the seller wouldn’t need to disclose any of this information.

That introduces risk. You could end up buying a home that turns out completely different to the one you were originally promised. As a buyer: Section 32 protects you against this exact scenario. It provides a transparent breakdown of everything you need to know to decide whether to buy a property. It lets you learn all of the important details before you sign the dotted line. As a seller: The Section 32 vendor statement is required by law. If you don’t provide it (or aren't transparent about all of the details) when selling property, you can face legal consequences. The buyer can also cancel the contract and even seek damages if your document is incomplete or defective. It pays to get it right first time.

What details should be included in the Section 32 document?

Given the name 'Section 32 Vendor Document', you could be fooled into thinking Section 32 is one big article. But this isn't entirely true. Section 32 is actually made up of a bunch of different documents detailing different elements of the property. Let's break down some of those elements now. Title document The title document proves to the potential buyer that the seller actually owns the property. That means they have the right to sell it. It seems obvious. But it’s an important detail to clarify. Land information This section will include core information about the property like whether it’s a house, apartment or block of land, as well as dimensions and any encumbrances or restrictions the buyer should be aware of. Vendor information The vendor needs to include all of their information in this section such as contact numbers and addresses, plus any other important details of the seller. Financial details This section focuses on rates, taxes and fees that apply to the property. Think council tax, water rates, land tax, levies, and any applicable fees the buyer needs to consider.

Mortgages Does the home have an outstanding mortgage? And if so, does it need to be discharged at settlement? It’s important the buyer understands these details before they buy the home.

Easements/covenants/restrictions An important but often overlooked element. This section details building guidelines and things the owner needs to comply with when using the land. It also details whether other people have the right to use parts of the property for things like access or drainage.

Zoning Certificate If you want to expand or use the property for commercial purposes, you’ll want to see the zoning section. It’ll detail planning permission as well as what the land can and cannot be used for. Building permits This document includes building permits from the last seven years showing any approved renovations or extensions. It’ll also reveal any building orders, compliance issues, or notices connected to the land. Utilities and services Your Section 32 should also have info on different utility connections like water, gas and electricity. It should also detail any connections or outstanding fees so that the buyer can properly budget for their move. Environmental concerns Are there any problems with soil contamination? Any issues with asbestos? Is the area prone to bushfires? Are there nearby landfills? All of this information needs to be revealed to the buyer ahead of time. Owners corporation certificate If the property is part of an apartment, the section 32 document needs to include an Owners Corporation Certificate. This will show the buyer whether the body corporate is profitable or in deficit, as well as detailing maintenance fees for the property. Usefully, this section will also reveal any other restrictions such as whether you can have pets. Any additional information Lastly, if there’s any other important information or special conditions not covered in the previous sections, it should be included. Transparency is key - “it’s best to provide as much relevant documentation as possible rather than get caught out because you didn’t divulge an essential detail.

How does Section 32 help you as a buyer?

Your Section 32 provides you with the information you need to decide if you should buy a property or not. That means it offers a number of important benefits:

How do I prepare my Section 32 document as a seller?

The best single piece of advice we can give when taking the steps to draft a Section 32 document is: Don’t go it alone. Remember that getting it wrong is at best a ticket for your buyer to end negotiations and at worst a criminal offence. Your lawyer or conveyancer will draft up the document for your review. They create these documents every day so will know every detail that must be included. They can also let you know your obligations and prompt you to gather relevant documentation like mortgages and outgoings. Aside from that, having a legal representative draft up your document will prove that you’ve sought legal advice during the sale of your property, safeguarding you if you require it. You’ll likely be able to retain the deposit if the buyer backs out provided you’ve got all the details of your Section 32 Vendor Statement right. You should read through your document once you’ve prepared it to make sure everything is entirely accurate. Again, legal professionals like licensed conveyancers can help with this.

What to do after receiving a section 32 as a buyer

Received your Section 32 statement from the seller? Great! This is your chance to really scrutinise the deal and make sure it’s the right fit. You don’t need to sign anything on Section 32 as a buyer. Instead, you should receive this document alongside a separate contract of sale. The Section 32 is really just a document for you to review before you sign off on this contract. Still, it’s a crucial document nonetheless and it definitely requires your attention. Here are a few things to consider:

Once you receive your Section 32 and contract of sale, you’ll have a cooling off period of three days to check over everything. This is your chance to make sure everything is in order or back out of negotiations if the seller failed to provide the document or provided incomplete or misleading information.

What happens if the Section 32 is defective or incomplete?

That depends. If the vendor statement is missing certain documents or intentionally misleading, the buyer will have leverage to end the contract as they please without any financial penalties for cutting ties. This doesn’t mean the buyer will necessarily want to do this. They might instead want to ask for further documentation or clarification to keep the deal moving forward. Know that what constitutes ‘defective’ or ‘incomplete’ isn’t always cut and dry. In some minor cases the seller may have legal grounds to dispute the buyer if they want to end negotiations. It works on a case-by-case basis. That said, if you intentionally provide the wrong information this can be charged as a criminal offence. You’ll also open the door to civil claims. That’s why we’re steadfast that it’s best to consult a conveyancer or lawyer to help you create your document.

The bottom line

Section 32 doesn't need to spell confusion. Do your due diligence. Cover all your bases. Work with a professional. Do these things and you'll find Section 32 the easiest way to determine whether a property is worth your time and money. Still, the most important part about any section 32 agreement is getting the right help. We at DiJones have served Australia's homeowners and buyers since 1992. Get in touch with our team of experts today if you'd like some additional support.

FAQs

Do I still need a Section 32 vendor statement for private sales? Yep. It’s still a legal requirement to provide the documents even if you don’t go through a real estate agent. Buyers can end the negotiation instantly if a seller refuses to provide them. Do I definitely need a lawyer or conveyancer to look over the document? Not necessarily if you have experience with legal writings, but otherwise we definitely recommend it. Section 32 can be confusing. That’s especially true if you’re buying your first home. It’s always best to consult a professional. Are there any details a seller doesn't need to include in their Section 32 document? Section 32 is comprehensive but it doesn’t cover everything. Your seller doesn’t need to include details like property valuation, the internal condition of the property, pest control reports, or any info about the neighbourhood. You’ll have the opportunity to assess some of these things during your property inspection before the settlement date. When is a Section 32 provided to the buyer? The Section 32 Vendor Statement must be provided by law alongside the contract of sale. That said, it’s good practice to provide the document to prospective purchasers sooner to give more time to iron out any additional complexities. We believe the best time to give the document is as soon as somebody shows serious interest in the property. Does Section 32 apply if I buy at auction? Yes. You’ll still need to receive a Section 32 for a property sold at auction. The difference is that there is no three day cooling off period. That means the seller should provide the document immediately after the buyer has purchased the property.