A Section 32 – actually called a Vendor’s Statement – is a document provided by the vendor when they decide to sell real property. It is an important document that must be given to any intended purchaser.
Though the proper name for this document is a Vendor’s Statement, it is referred to as a Section 32 because it is implemented by Section 32 of the Sale of Land Act. Under this Act, it is required that a person selling real property must disclose all information that affects the land that they are selling; information that may affect the decision of a potential purchaser in going through with the transaction.
What is contained in a Section 32?
The information required under a Section 32 / Vendor’s Statement refers to those things that wouldn’t be made immediately apparent during an inspection. This could include, for example:
- The services that are connected and supplied to the land.
- The zoning of the property.
- Whether there are any VicRoads or Council proposals for the land.
- A statement of the Title and a copy of the plan.
- Any information regarding an Owners Corporation.
When you are selling a property at auction, there are stricter regulations regarding what must be disclosed in the Vendor’s Statement. This is because, for private sales, there is a 3-day ‘cooling-off’ for the purchaser after signing the Contract. During this period, the purchaser has the right to change their mind, walk away from the deal and retain their deposit. When a property is sold at auction, there is no such ‘cooling-off’ period.
Just as much as a Vendor’s Statement is beneficial for the purchaser of the property, it is also beneficial for the vendor. If a Vendor’s Statement is not provided before the Contract is signed, the purchaser may be able to terminate the Contract and retain their deposit. A Vendor’s Statement acts as a safeguard for the vendor once the ‘cooling-off’ period has ended.
Who Prepares a Section 32 and When is it Provided?
A Vendor’s Statement must be provided to the purchaser of real property before the Contract has been signed. The document must be provided by the vendor as pre-Contract disclosure.
Though the use of conveyancing services is not required by law in Victoria, a qualified conveyancer should assist in the preparation of a Vendor’s Statement. A Vendor’s Statement is a legal document; in order for the vendor to fully understand and fulfil all of their legal responsibilities associated with the document, advice should be sought from a professional.
Once the Vendor’s Statement has been prepared, the vendor must sign it. No other signature is required on the document.
A Section 32 is actually known as a Vendor’s Statement. It is only referred to by the former term as it is implemented under Section 32 of the Sale of Land Act in Victoria.
A Vendor’s Statement is a document that the vendor of a piece of real property must prepare and give to the purchaser before the Contract is signed.
Vendor’s Statements exist for the protection of vendors and purchasers alike. The document is beneficial to the purchaser as it makes clear those aspects of the property that wouldn’t necessarily be noticeable during an inspection, including any future plans for the land.
In turn, a Vendor’s Statement is necessary to protect the vendor’s right to retain the purchaser’s deposit. If the Vendor’s Statement is not prepared properly – or not prepared at all – then the purchaser may be able to retain their deposit and cancel the transaction, even after the Contract has been signed and the ‘cooling-off’ period has expired.
In order that the vendor fully understands their responsibilities with regards to the Vendor’s Statement, it is highly advisable that the vendor employs the services of a conveyancer to assist in the preparation of the document.
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For professional conveyancing services and advice, call Rose Lawyers on 03 9878 5222.