It’s always an exciting time when you are buying property or land. Read this guide to be aware of what you need to know before you buy!
What is a Section 32 statement?
A Section 32 statement is also known as the vendor’s statement. This document is called a Section 32 statement because the information the seller must provide is outlined in Section 32 of the Sale of Land Act 1962. Before a property is sold, a seller must provide the buyer with a Section 32 statement.
The Section 32 statement is:
- prepared by the seller’s solicitor or conveyancer
- signed by the seller
- attached to the contract of sale
- made available to prospective buyers along with the contract of sale, usually by the estate agent and before the sale or auction.
Section 32 statements are sometimes prepared a few weeks or months before the sale of the property, so buyers should either:
- ask for updates on the contract before signing the contract, or
- sign the contract subject to the vendor providing updated information on the property
It is a legal document and must be factually accurate and complete. If it contains incorrect or insufficient information, a buyer may be able to withdraw from the sale or take legal action against the vendor. It is strongly recommended that buyers have their Section 32 statements reviewed by their lawyer or conveyancer before signing any documents.
What information can I find in a Section 32 Statement?
The Section 32 statement contains information about the property’s title, including:
- mortgages
- covenants
- easements
- zoning
- outgoings (e.g. council rates)
- declaration if located in a bushfire-prone area
- if the property is managed by an Owners Corporation
A Section 32 Statement does not include any information about:
- the condition of buildings
- whether any construction on the property comply with building regulations
- the accuracy of measurements of the property boundaries
It is your responsibility as a buyer to conduct additional due diligence on matters that does not legally have to be included in the Section 32 statement.
Contract of sale
A prospective buyer makes an offer to buy a property by signing a contract of sale. The offer is accepted when the seller signs the contract. A property is sold when both buyer and seller have signed the contract of sale.
The contract of sale contains:
- details of the property such as the address and the property ID number (known as the volume and folio number)
- names of the seller and buyer
- details of the seller’s estate agent, if they have one
- details of the seller’s and buyer’s legal practitioner or conveyancer, if they have one
- the price
- the deposit
- any special conditions such as ‘subject to finance’.
The contract must clearly specify whether the sale price includes or excludes the Goods and Services Tax (GST), and how the GST will be calculated if it is included.
Generally, the GST only applies to the purchase of new homes. It does not apply to established homes unless the seller is registered for GST. You can check a seller’s GST status on the Australian Business Register.
Real Estate Agents’ Responsibility
An agent’s responsibility is ultimately to the seller, not the buyer. However, they are obliged to act responsibly and ethically when dealing with both buyers and sellers.
You can expect an estate agent to:
- take your details and provide advice about relevant properties for sale
- answer questions about listed properties
- arrange inspections
- provide you with a copy of the Contract of Sale with the signed Section 32 statement
- communicate genuine offers to the seller
- organize the signing of the contract
Want to know more?
See our latest articles for First Home buyers:
- The Buyer’s Shortlist – Property Coach’s Best Articles For All Property Buyers
- Are You Ready to Buy a Property in Melbourne? Here’s the Complete Checklist!
- Buyers beware! Common mistakes to avoid when purchasing a home
- How to buy a house: a guide for first home buyers
Contact W Legal Group
The team at W Legal Group can guide you through the purchasing process, from the first contract review all the way to settlement day. Contact us via phone or use our Get A Quote form for a response within 2 business hours.
