What is a Section 32 Vendor Statement

2. What is a section 32 vendor statement? • A section 32 vendor statement refers to the legal document given by the seller to the potential buyer. Essentially, this document contains all the information about the property that is required by law that the seller must provide to the buyer. It must include all the information that may affect the state of the property, especially where such information may affect the decision of the buyer. • The name of the document comes from the legislation that governs the vendor statement, section 32 of the Sale of Land Act of Victoria. The statement should not be confused with the contract of sale, which is a separate document. • Given its legal nature, it is recommended that a qualified lawyer or licensed conveyancer prepare (for the seller) and review (for the buyer) the section 32 vendor statement prior to signing the Contract of Sale. https://www.thinkconeyancing.com.au/section-32

3. The section32vendor statement provides the buyer with important information about the state of the property. Legislation dictates that the seller must bring certain matters to the attention of the buyer about the property. So being a legal requirement, there are severe consequences if a section 32 vendor statement is not provided or is found to be incomplete or defective. Although the name may sound like one document, the section 32 vendor statement is actually made up of a number of different documents about the property. Essentially, the vendor statement is a full disclosure of all matters relating to the property that the buyer must be made aware of. Why is a section 32 vendor statement important? What does a section 32 vendor statement look like?

4. Who needs to sign a section 32 vendor statement? • As the name suggests, the vendor statement is prepared by the vendor, that is, the seller. And it is the seller who will then need to sign the document before serving it on any person interested in buying the property. • Some real estate agents may also require that the buyer sign the section 32 vendor statement as proof that the statement was in fact provided by the agent. • Due to the legal nature of the section 32 vendor statement, it is recommended that the seller get the document prepared by a lawyer or conveyancer. https://www.thinkconeyancing.com.au/section-32

5. The section 32 vendor statement is REQUIRED BY LAW and failure to provide it may give the buyer the option to walk away or invalidate the sale entirely. The statement is a disclosure document that contains a range of attachments that provide information to the buyer about the condition of the property. Such information includes title search, statutory warnings, mortgages as well as other charges on the property and zoning requirements. SELLER AND THE SECTION 32 VENDOR STATEMENT Why is the section 32 vendor statement important for the seller?

6. What happens is the section 32 vendor statement is found to be defective? • The bottom line is, where a section 32 vendor statement is found to be defective, the buyer may be entitled to end the contract without any financial penalty. Whether the defect is enough to constitute ending of the contract is still a question that needs to be carefully considered. If you are the seller and the buyer is of the view that the section 32 vendor statement is defective and wishes to rescind the contract, you may want to seek legal advice as there are exceptions to the situation. • Where you as the seller have given incorrect information intentionally, this can actually constitute a criminal offence. So in providing the section 32 vendor statement, you need to ensure that the information you provide is also accurate and not deliberately misleading. https://www.thinkconeyancing.com.au/section-32

7. What are the steps to draft a section 32 vendor statement? • Due to the risk of a defective section 32 vendor statement, it is advisable to get a professional to prepare it for you. A lawyer or conveyancer will be familiar with the requirements of a section 32 vendor statement and will have their respective checklists to ensure compliance with the legislation. • The time it takes to prepare a section 32 will depend on the particular property and the various reports that pertain to its condition and state. https://www.thinkconeyancing.com.au/section-32

8. How do you read a section 32 vendor statement as a seller? • As the seller, you need to ensure that the documents you attach as part of the section 32 vendor statement are accurate and the buyer will be able to access them. There are many factors that will not be apparent during an inspection alone so you should ensure your section 32 vendor statement provides clarity and covers aspects that the buyer must know about under the law. For instance, services that are connected to the land, zoning particulars, government proposals and so on. • The section 32 vendor statement is also beneficial for the seller as it acts as a safeguard once the cooling off period ends so the seller is able to retain the deposit where the buyer decides to not go through with the sale. https://www.thinkconeyancing.com.au/section-32

9. Regardless of whether you use a real estate agent or not to handle the sale, you are required by law to provide a section 32 vendor statement. So it is best to engage a lawyer from the outset and start the process. Any buyer worth his or her salt will ask for the section 32 vendor statement. You want to be prepared and ensure a good sale is not hindered by lack of organisation Due to the critical nature of the section 32 vendor statement and its legal consequences, it is advisable to request a lawyer to prepare it. Where a section 32 vendor statement is found to be defective, there can be serious consequences to the sale and the buyer may in fact be able to walk away. For these reasons, it is best to engage a professional from the outset. Lawyers and conveyancers prepare section 32 vendor statements day in and day out so are well positioned to draft an accurate document without taking too much time. Having a lawyer or conveyancer draft the document will also allow you to ensure you understand your obligations as the seller and feel satisfied that all relevant requirements have been met. Do I need a lawyer to prepare the section 32 vendor statement? Do I still need a section 32 vendor statement in a private sale?

10. Upon inspecting a property, there are many aspects that are not immediately or obviously apparent. As such, the law requires the seller to DISCLOSE certain matters to the buyer so that they can make an informed decision about the purchase of the property. The section 32 vendor statement is required by section 32 of the Sale of Land Act and must disclose all particulars that may affect the property in question. BUYER AND THE SECTION 32 VENDOR STATEMENT Why is the section 32 vendor statement important for the seller?

11. What about private sales? • Any property that is being sold in the state of Victoria must be accompanied by a section 32 vendor statement. Even if no real estate agent is involved, the seller must still provide a section 32 vendor statement. If one is not provided, ask for it. And if the request is declined, it is better you not proceed with the sale, no matter how much you may love the property. https://www.thinkconeyancing.com.au/section-32