Section 32 vendor’s statement

Building permits issued in the last 7 years must be disclosed. Under this section permits that should have been obtained or work that was done without a permit do not need to be disclosed.

This means that if you are selling a property, you must disclose any building permits that have been issued for work done on the property in the last 7 years. This includes permits for renovations, additions, and repairs. However, under this section you do not need to disclose permits that should have been obtained but were not, or work that was done without a permit.

When selling a property that is affected by an owners corporation, a vendor must attach an owners corporation certificate to the section 32 vendor’s statement. The certificate must be issued pursuant to section 151 of the Owners Corporation Act 2006 and must include copies of the following documents:

• The rules of the owners corporation
• A prescribed statement providing information to prospective purchasers
• All resolutions made at the last annual general meeting
• A statement that further information can be obtained by inspecting the owners corporation register

An owners corporation certificate is not required if the owners corporation is inactive. An owners corporation is considered inactive if it has not held a meeting, struck levies, or held insurance in the preceding 15 months.

However, if the property is on a plan that includes common property, then section 11 of the Sale of Land Act 1962 requires the vendor to ensure that all required insurance is in place. Section 60 of the Owners Corporation Act 2006 requires owners corporations to take out public liability insurance in respect of common property. Therefore, the effect of section 11 is to require the vendor to ensure that the owners corporation has common property insurance, which would make the owners corporation no longer “inactive”.

The “inactive” exception may still be applicable if the property being sold is on a 2-lot plan, as these are exempt from the insurance obligation under section 7 of the Owners Corporation Act 2006.

Failure to include an owners corporation certificate in the section 32 vendor’s statement may entitle the purchaser to void the contract, as per the decision in Nicolacopoulos v Khoury [2010] VCC 1576.

This section requires a vendor to disclose any growth areas infrastructure contribution (GAIC) that is payable in respect of the property being sold. This information must be included in the section 32 vendor’s statement.

A GAIC is a levy that is imposed on properties in growth areas to fund the provision of infrastructure, such as roads, schools, and parks. The amount of the GAIC is determined by the State Revenue Office.

The title search will reveal whether there is a GAIC payable in respect of the property. If there is a GAIC, the vendor must disclose the following information in the section 32 vendor’s statement:

• The amount of the GAIC
• The date on which the GAIC is payable
• The method of payment
• The consequences of not paying the GAIC

Failure to disclose a GAIC in the section 32 vendor’s statement may entitle the purchaser to avoid the contract.

This section requires a vendor to disclose any services that are not connected to the property being sold. This information must be included in the section 32 vendor’s statement.

The specified services are electricity, gas, water, sewerage, and telephone. A service is not considered to be connected unless it is actually operating on the property. For example, if the electricity comes to the meter box but the service is not operational within the property, it would be considered to be “not connected”.

The vendor is not required to advise whether services are available in the area. However, if the vendor knows that a particular service is not available, they must disclose this information.

This section requires a vendor to provide the following evidence of title to the purchaser:

• A copy of the most recent title search
• If the vendor is not the registered proprietor, evidence of the vendor’s right to sell
• If the land has ever been subdivided, a copy of the plan of subdivision

Title

The vendor must provide a copy of the most recent title search for the property. This will show the current registered proprietor of the property, as well as any mortgages or other encumbrances on the title.

Proof of right to sell

If the vendor is not the registered proprietor of the property, they must provide evidence of their right to sell the property. This may be in the form of a copy of the purchase contract, a copy of the proposed transfer, a copy of the will or a copy a power of attorney.

Plan of subdivision

If the land has ever been subdivided, the vendor must provide a copy of the plan of subdivision. This will show the boundaries of the subdivided lots and any easements or covenants that affect the property.

If the land is described as a lot on a plan, but has not yet been subdivided, the vendor must provide a copy of the plan.

If the land is a lot on a proposed plan of subdivision, the vendor must provide a copy of the proposed plan.

If the land is in the second or subsequent stage of a plan of subdivision, the vendor must provide the following information:

• A copy of the plan for the first stage
• Details of any requirements in a statement of compliance for the stage in which the land is included that have not been complied with
• Details of any proposal relating to subsequent stages
• Details of planning permits authorising staged subdivisions

This section allows the vendor to provide the required information in the section 32 vendor’s statement by attaching a certificate, notice, policy of insurance, or any other document.

Here are some examples of documents that may be attached to the section 32 vendor’s statement:

• A certificate of title
• A plan of subdivision
• A building permit
• An insurance policy
• A notice of intention to subdivide
• A report from a surveyor or engineer

This section sets out the consequences of a vendor’s failure to comply with the disclosure obligations. The purchaser may terminate the contract if the vendor fails to comply with the disclosure obligations, but only if the following two conditions are met:

1. The vendor has acted honestly and reasonably.
2. The purchaser is not “substantially in as good a position” as they would have been if the vendor had complied with their disclosure obligations.

Honest and reasonable

The vendor is considered to have acted honestly and reasonably if they took all reasonable steps to provide accurate and complete information in the section 32 vendor’s statement. This includes taking steps to obtain the necessary information, and to verify the accuracy of the information.

A vendor will not be excused for their failure to comply with the disclosure obligations simply because they were negligent. However, a number of cases have excused vendors despite their negligent behaviour. This is because the courts have recognized that the disclosure obligations can be complex and difficult to comply with.

Substantially in as good a position

A breach of the section 32 vendor’s statement will be excused if the purchaser is not “substantially in as good a position” as they would have been if the vendor had complied with their disclosure obligations. This means that the purchaser must show that they have suffered some detriment as a result of the vendor’s failure to disclose the information.

The purchaser can establish that they have suffered detriment if they can show that they would not have purchased the property if the disclosure had been made. However, the purchaser’s actual knowledge of the true situation is a relevant consideration in determining the consequences of the vendor’s conduct.

For example, if the purchaser knew about the undisclosed information before they entered into the contract, they would not be able to terminate the contract on the grounds of non-disclosure.

Failure to provide a section 32 vendor’s statement

Failure to provide a section 32 vendor’s statement does not make the contract illegal or void. It simply provides the purchaser with a possible right to terminate the contract.

The purchaser must exercise this right within a reasonable time after becoming aware of the vendor’s failure to comply with their disclosure obligations.

This section makes it an offence for a vendor to provide false, incomplete, or misleading information in the section 32 vendor’s statement. It is also an offence to fail to provide the section 32 vendor’s statement at all.

If you are a vendor, it is important to take steps to ensure that you comply with the disclosure obligations. This includes:

• Obtaining all of the necessary information about the property.
• Verifying the accuracy of the information.
• Providing the information in a clear and concise manner.

If a notice of intention to acquire land  has been served under the Land Acquisition and Compensation Act 1986 in respect of land that is subject to a contract of sale, the purchaser may rescind the contract.

A vendor cannot contract out of the disclosure obligations under the Sale of Land Act 1962. This means that the vendor cannot try to exclude or limit their liability for failing to disclose information to the purchaser.

Any attempt by the vendor to contract out of the disclosure obligations is void. This means that the vendor will still be liable for failing to disclose information, even if they have a clause in the contract that says they are not liable.

If information has been disclosed to the purchaser in a prior contract for the sale of the same property, the vendor does not need to repeat the disclosure in a subsequent contract.

This is because the purchaser is already aware of the information, and they cannot be said to have been misled by the vendor’s failure to disclose it again.

However, the vendor must still take reasonable steps to ensure that the purchaser is aware of the information. This may involve providing the purchaser with a copy of the prior contract, or reminding them of the information that was disclosed.

The estate agent or the vendor must ensure that the purchaser has received a copy of the Due Diligence Checklist. Failure to do so is an offence, but it does not entitle the purchaser to avoid the contract.

The Due Diligence Checklist is a list of questions that the purchaser should ask the vendor about the property. The checklist is designed to help the purchaser to identify any potential problems with the property.

The checklist includes questions about the property’s title, zoning, planning approvals, and environmental hazards. It also includes questions about the property’s condition, such as whether there are any defects or repairs that need to be made.

If the purchaser does not receive a copy of the Due Diligence Checklist, they should ask the vendor for one. They should also ask the vendor to answer any questions that they have about the property.

It is important for purchasers to do their own due diligence before they buy a property. This means that they should research the property and ask questions about it. The Due Diligence Checklist is a helpful tool for doing this.