What is a section 32 statement?
Section 32 of the Sale of Land Act (‘the Act’) requires a vendor selling real estate to provide certain information to a purchaser before a contract of sale is signed.
The purpose of the statement is to fully disclose all pertinent information about the land to the potential buyer. The information required is extensive, and it can be confusing to ensure everything you need to provide is included.
What does it contain?
The precise requirements of a statement will depend on the circumstances of the particular sale. Some of the key section 32 statement requirements follow:
- Details of the vendor, including their entitlement to sell the land;
- Details of the title to the land being sold;
- Information about building permits issued in the last seven (7) years;
- Particulars of any owner-builder warranty insurance;
- Particulars of any mortgages or charges or other debts over the land;
- Particulars of any covenants, easements or other restrictions on title;
- This is regardless of whether such restrictions are registered on the title or not.
- Planning information;
- This includes any zoning restrictions on land use or if the land is in a bushfire-prone area.
- Particulars of any outgoings payable by the property owner;
- Disclosure of any notices or orders issued by relevant authorities;
- This includes information regarding fencing, sewerage or road-widening procedures.
- Particulars of services connected to the land.
Note that selling land in an owners corporation (or body corporate) has slightly different disclosure rules.
Prospective purchasers should remember to check the statement to ensure it contains disclosure/information about everything required. This is best done with the assistance of a lawyer.
Is it necessary?
Vendors are obligated to and therefore must provide a signed section 32 statement if they are selling real estate to enable prospective purchasers to make an informed decision about the sale.
The statement is usually prepared by the vendor’s lawyer and provided to the vendor’s real estate agent, who then makes copies to distribute to potential purchasers.
Consequences of not providing the statement
Generally, failure to provide a statement containing all of the proper and requisite information before a contract of sale is signed will mean the purchaser is able to cancel and escape the contract. There are limited exceptions to this rule dependent on specific circumstances.
It is not sufficient in any circumstances for a statement to be provided after a contract of sale is signed. For example, if a sale contract was expressed to be ‘subject to’ the vendor providing a statement to the purchaser, the sale is not valid and the purchaser will be entitled to cancel it.
Also, it is a criminal offense for a vendor to knowingly or recklessly provide false information in their statement, or to fail to provide all of the necessary information required by section 32. This is punishable by a fine of over $7000.
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