Section 32 Vendor Statement Explained: What Victorian Buyers Must Know
Understand the Section 32 Vendor Statement required for all Victorian property sales. Learn what must be included, how to read each section, and what happens if the vendor statement is defective.
Definition
What is a Section 32 Vendor Statement?
A Section 32 Vendor Statement is a mandatory legal document under the Sale of Land Act 1962 (VIC) that the vendor must provide to the buyer before the buyer signs the contract of sale. It discloses essential information about the property including title details, planning restrictions, building permits, services, and owners corporation information.
If you are buying property in Victoria, the Section 32 (also called a vendor statement) is one of the most important documents you will encounter. Named after Section 32 of the Sale of Land Act 1962, this document is the vendor's legal obligation to disclose material facts about the property before you commit to purchasing it. For a broader look at vendor disclosure obligations across all Australian states, see our dedicated guide.
A defective or incomplete Section 32 can give you the right to rescind (cancel) the contract — even after exchange. Understanding what should be included, how to read each section, and what to look for is essential for any Victorian property buyer.
What Must Be Included in a Section 32
- 1
Title particulars
A copy of the certificate of title showing the registered owner, lot and plan details, and any encumbrances (mortgages, caveats, easements, or covenants) registered on the title.
- 2
Planning information
Details of the planning zone the property falls within (e.g., General Residential Zone, Neighbourhood Residential Zone) and any overlays that affect the land (heritage, environmental, flood, bushfire). This information comes from the local council or planning authority.
- 3
Building permits and compliance
Disclosure of any building permits issued in the last 7 years, whether an occupancy permit or certificate of final inspection has been issued, and details of any building work that may not have been approved.
- 4
Outgoings
Disclosure of council rates, water rates, land tax, and any other regular charges payable in respect of the property. This helps the buyer understand the ongoing holding costs.
- 5
Services connected to the property
Information about which services are connected — electricity, gas, water, sewerage, telephone, and internet. For rural properties, details about water supply (bore, tank, dam) and septic systems.
- 6
Owners corporation (body corporate) details
If the property is part of a strata or owners corporation scheme, the Section 32 must include the owners corporation certificate detailing annual fees, insurance, rules, any outstanding special levies, and pending litigation.
- 7
Easements and covenants
Details of any easements registered on the title (such as rights of way, drainage, or utility access) and any restrictive covenants that limit what can be done with the property.
- 8
Road and access information
Disclosure of whether the property has legal road access and whether any road adjacent to the property is a government road or requires council approval for access.
- 9
Notices and orders
Any notices, orders, or proposals by a government authority that affect the property, such as compulsory acquisition notices, road widening proposals, or environmental remediation orders.
- 10
Vendor warranty disclosure
The vendor must disclose any defects or issues they are aware of that materially affect the property. Failure to disclose known material defects can give the buyer grounds to rescind the contract.
How to Read Each Section of a Section 32
Title and Ownership
Start by confirming the vendor named in the contract matches the registered proprietor on the title. If the property is owned by a company, trust, or multiple parties, verify this is reflected correctly. Check the volume and folio reference matches across all documents.
Review the title diagram to understand the exact lot boundaries. If the property is part of a subdivision or strata plan, check the lot and plan numbers match the property you inspected.
Encumbrances on Title
This section lists everything registered against the title. Common encumbrances include:
- Mortgages: The vendor's existing mortgage will be discharged at settlement. This is standard and not a concern.
- Easements: Review the purpose, location, and beneficiary of each easement. A drainage easement through the backyard may prevent you from building a pool or extension.
- Covenants: Restrictive covenants may prevent certain building materials, require minimum setbacks, or restrict the property to single-dwelling use. Check that your intended use of the property is not restricted.
- Caveats: A caveat indicates someone else claims an interest in the property. If a caveat is present, the vendor should explain its nature and confirm it will be removed before settlement.
Planning and Zoning
The planning information reveals what you can and cannot do with the property. Check the zoning to confirm it matches your intended use (residential, commercial, farming). Review any overlays carefully:
- Heritage Overlay (HO): Restricts alterations to the exterior and sometimes interior of buildings. Permits may be required for even minor external changes.
- Bushfire Management Overlay (BMO): Requires specific construction standards and vegetation management. Insurance costs may be significantly higher.
- Flood Overlay: Indicates the property is in a flood-prone area. This affects insurance availability, cost, and future development potential.
- Environmental Significance Overlay (ESO): Restricts vegetation removal and development to protect ecological values.
Building Permits
Check whether building permits have been issued for any work done in the last 7 years and whether final inspection certificates or occupancy permits were obtained. Unpermitted building work is a significant risk — it may not be insurable, could be structurally unsafe, and the local council can order its removal at the owner's expense.
Owners Corporation (Strata)
For apartments and townhouses, the owners corporation certificate is critical. Review:
- Annual fees: What are the current levies and how have they changed over recent years?
- Sinking fund (maintenance fund): Is it adequately funded? A low sinking fund may indicate upcoming special levies.
- Special levies: Are any special levies planned, proposed, or recently passed? These can run to tens of thousands of dollars per lot.
- Litigation: Is the owners corporation involved in any legal proceedings? This can signal building defects or internal disputes.
- By-laws and rules: Check for restrictions on pets, renovations, short-term rentals, and parking that could affect your use of the property.
Outgoings and Rates
Use the disclosed rates figures to calculate your total annual holding costs. Council rates, water rates, and owners corporation fees are ongoing obligations. If the vendor pays land tax (applicable to investment properties), note the current amount — though your land tax liability will be calculated based on the total value of all land you own.
Consequences of a Missing or Incorrect Section 32
A vendor who fails to provide a Section 32 before the buyer signs the contract is in breach of the Sale of Land Act 1962. The consequences can be significant, potentially allowing the buyer to rescind even after exchange of contracts:
- Right to rescind: If the Section 32 was not provided, or if it contains material errors or omissions, the buyer has the right to rescind the contract. The buyer receives a full refund of the deposit with no penalty.
- Time limit: The right to rescind must be exercised before settlement. Once settlement has occurred, the buyer's remedies are more limited (though they may still have a claim for damages).
- Vendor penalties: A vendor who knowingly provides false or misleading information in a Section 32 may face penalties under the Sale of Land Act and potential civil liability for losses the buyer suffers as a result.
Always have a Section 32 reviewed by your conveyancer before signing the contract. A thorough review of the Section 32 is one of the most important steps in buying property in Victoria. Many issues that are expensive to deal with after settlement — unpermitted building work, restrictive covenants, inadequate strata funds — are discoverable through a careful reading of the vendor statement.
Frequently Asked Questions
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