Section 32 Vendor Statements in Victoria Explained

What is a Section 32 vendor statement?

A Section 32 statement — formally a "vendor's statement under section 32 of the Sale of Land Act 1962 (Vic)" — is a prescribed pre-contractual disclosure document. It is signed by the vendor and provided to a prospective purchaser before that purchaser signs the contract of sale. Its purpose is to bridge the asymmetry of information between the vendor (who knows the property) and the purchaser (who does not).

The statement collates information that the purchaser would otherwise need to obtain through searches, queries and inspections — title particulars, encumbrances, planning controls, outgoings, services, owners corporation matters and (in defined cases) building and owner-builder information. It is not a warranty of the physical condition of the property — that is the subject of separate inspections — but it is a warranty of the matters disclosed.

Why Section 32 statements matter in Victoria

Section 32 statements matter for three independent reasons.

First, statutory compliance. The obligation to provide a compliant statement is imposed by statute. Failure to comply gives the purchaser a right of rescission (section 32K) and exposes the vendor to criminal penalties for knowing or reckless misstatements.

Second, transaction certainty. A clean Section 32 minimises the risk of a purchaser walking away in the run-up to settlement. A statement that omits a planning overlay, a building permit, an owners corporation special levy or an unregistered easement gives a regretful purchaser a ready-made exit.

Third, price and marketability. A poorly prepared statement causes purchasers' lawyers to advise their clients to walk away or to discount their offer. Vendors who invest in a clean disclosure package typically transact faster and at better prices.

Who prepares the Section 32?

The Section 32 is prepared by the vendor's lawyer or licensed conveyancer. Real estate agents do not (and should not) prepare Section 32 statements — they are not licensed to provide the underlying legal advice and they do not order the searches and certificates on which the statement is built.

Although the document is drafted by the lawyer or conveyancer, the vendor remains legally responsible for its accuracy. The signature on the statement is the vendor's. The vendor's representative is responsible for asking the right questions and obtaining the right certificates; the vendor is responsible for honestly and completely answering those questions and disclosing matters within their knowledge.

When a Section 32 must be provided

The Section 32 must be provided to the purchaser before the purchaser signs the contract of sale. The form of delivery does not matter — electronic delivery is standard practice — but the timing is mandatory.

At a public auction, the statement (together with the contract of sale) must be available for inspection at the auction venue for at least 30 minutes before bidding starts. Auction bidders are expected to have read and considered the statement before raising their paddle; there is no cooling-off period after the fall of the hammer.

For private sales, the statement is typically delivered to interested purchasers as part of the contract package on first enquiry. Where the purchaser's solicitor negotiates pre-contract variations, the statement and contract may be re-issued to reflect the agreed terms before signing.

What must be disclosed

Section 32 of the Sale of Land Act and its supporting regulations prescribe the disclosure categories. The categories below are the core ones — others apply in specific circumstances (for example, the Growth Areas Infrastructure Contribution for land in a designated growth area, or particular requirements for sales by mortgagees in possession).

Title particulars

The statement must disclose title particulars and attach the title documents. In practice this means:

• the full name(s) of the registered proprietor(s);
• the lot and plan identifier and the volume and folio of the certificate of title;
• a copy of the register search statement;
• a copy of the plan of subdivision (or other plan) referred to on the title; and
• copies of any instruments referred to on the title — registered covenants, easement deeds and similar documents.

Mortgages, caveats and charges

Mortgages over the property must be disclosed, with the mortgagee identified. The mortgage does not need to be discharged before sale — the standard contract contemplates that the mortgage will be discharged out of settlement proceeds — but the existence of the mortgage must be on the face of the statement.

Caveats and other registered charges must similarly be disclosed. Where a caveat sits over the title, the vendor's lawyer will usually arrange for its removal before settlement either by consent or by lapsing notice. See our note on caveat removal in Victoria for the procedural detail. Unregistered statutory charges (for example, an unpaid land tax assessment) must also be disclosed where known.

Easements and covenants

Easements and restrictive covenants registered on the title must be disclosed, with the instrument number referenced and a copy of the registered instrument attached. Equally important is the obligation to disclose unregistered easements and similar restrictions of which the vendor might reasonably be expected to be aware.

An unregistered drainage easement actually used by a neighbour, an unregistered right of way over the rear of the property, or a known fencing or party-wall arrangement that affects the boundary are common examples. Failing to disclose these matters is one of the most fertile sources of rescission claims. Our companion guides on easements and restrictive covenants on Victorian property explain how these interests run with the land and how they are enforced.

Planning and zoning information

The statement must identify:

• the planning scheme that applies to the land;
• the name of the responsible authority (usually the local council);
• the zoning of the land (for example, Neighbourhood Residential Zone, General Residential Zone, Commercial 1 Zone);
• any overlays (heritage, design and development, bushfire management, environmental significance, vegetation protection, land subject to inundation, floodway, special building, and others); and
• any planning permits issued in the past seven years.

Planning information is typically obtained from the relevant council planning property report or equivalent certificate. The vendor's lawyer should review the underlying overlays — not just the certificate's summary — because an overlay can significantly affect what can be built or done on the land.

Building permits and owner-builder issues

Any building permit issued in the past seven years must be disclosed, together with copies of the permit. This is captured by a building surveyor search.

If the works were performed by the owner under an owner-builder permit, additional obligations apply. The owner-builder must obtain a defects report and provide statutory domestic building insurance for the unexpired warranty period before the property can be sold (where the work has a contract price above the prescribed threshold). The defects report and the insurance certificate must accompany the Section 32. Failure to comply with the owner-builder rules is a recurring source of failed transactions.

Owners corporation information

For a lot affected by an owners corporation, the vendor must disclose:

• the owners corporation number(s);
• current annual fees and any unpaid amounts;
• any special levies (current or proposed);
• public liability and other insurance;
• current contracts of management;
• the owners corporation rules; and
• any current owners corporation legal proceedings.

In practice, this is satisfied by obtaining a current owners corporation certificate (under section 151 of the Owners Corporations Act 2006) and attaching it to the statement. Recent owners corporation minutes are usually attached as well. Where the certificate has not been obtained, the statement must say so and explain why. Where the property is the subject of a building defects dispute or other internal disagreement, our note on owners corporation disputes in Victoria explains how those matters are escalated.

Services connected to the property

The statement must identify which of the following services are connected: electricity, gas, water, sewerage and telephone. Where a service is not connected, that fact must be disclosed. For rural properties this is particularly important — disclosure that sewerage is not connected (with the property relying on a septic tank), or that town water is not available (with the property relying on a tank or bore), materially affects a purchaser's view of the property.

Rates, land tax and outgoings

All recurring outgoings must be disclosed. This includes council rates, the fire services property levy, water and sewerage rates, and (where applicable) land tax calculated on a single-holding basis. The vendor is not required to disclose their own land tax position (which depends on their total Victorian holdings), only what the land tax would be if the property were the vendor's only Victorian holding. Owners corporation fees and any special levies are disclosed separately.

Bushfire, flood and planning overlays

If the land is in a designated bushfire-prone area, the vendor must say so in the Section 32. Bushfire-prone areas are designated by the Minister for Planning and attract additional building requirements under the Building Code of Australia.

Flood risk is dealt with primarily through the planning section. A Land Subject to Inundation Overlay, Floodway Overlay, Special Building Overlay or Urban Floodway Zone all signal flood risk and must be disclosed as part of the planning information. Purchasers concerned about flood risk should also obtain a flood enquiry from the relevant water authority or catchment management authority.

What buyers should check

A purchaser's lawyer or conveyancer will review the Section 32 systematically before recommending that the buyer sign. The standard checks include:

• Title plan against marketing. Confirm that the lot dimensions and boundaries match the property as marketed. Discrepancies between the title plan and the agent's brochure are not uncommon.
• Easements and covenants against intended use. A restrictive covenant prohibiting dual-occupancy or a "single dwelling only" covenant can defeat a buyer's renovation or development plans.
• Planning controls. Confirm that the zoning permits the intended use and that no overlay prohibits proposed building works.
• Permits. Confirm that recent extensions, decks, garages and other works were the subject of a building permit and (where required) a planning permit, with a final certificate of occupancy or final inspection issued.
• Owners corporation health. Review fees, special levies, minutes and insurance. Special levies or significant arrears of unit entitlements can transfer to the purchaser on settlement.
• Outgoings. Sanity-check the outgoings against the buyer's budget.
• Attachments. Confirm that every attachment referenced in the body of the statement is actually attached.
• Cross-checks. Cross-check the statement against independent searches (a fresh title search, planning property report and rates certificate) to identify omissions.

Common seller mistakes

• Listing before the Section 32 is ready. Vendors who instruct their conveyancer late frequently lose buyers because the statement is not available when interest peaks.
• Omitting unregistered easements. A drainage easement actually used by a neighbour, a right of way across the rear lane, or a known boundary-fence arrangement.
• Omitting recent building permits. The vendor forgets the deck or garage was built under permit and the building surveyor search uncovers it after exchange.
• Owner-builder works without insurance. Sale of a property within the six-year warranty period without the required defects report and warranty insurance.
• Stale owners corporation certificates. Relying on a 12-month-old certificate that does not capture a recently announced special levy.
• Inconsistent overlay disclosure. Disclosing the planning zone but missing a heritage overlay or a bushfire management overlay that significantly constrains development.
• Out-of-date rates and water information. Using last year's notice rather than the current year's.
• Failing to update. A statement given in February that is not refreshed when the contract is signed in May, after a new special levy has been struck.

Defective or misleading Section 32 statements

A statement is "defective" when it fails to disclose information that must be disclosed, contains information that is false, or omits required attachments. "Misleading" extends to statements that, although literally true, are likely to mislead a reasonable purchaser by omission or framing — for example, disclosing that "no notices have been received by the vendor" when the vendor knows there are notices outstanding against a previous proprietor.

Defects can be substantive (a missing easement, a missing permit) or formal (a missing signature, a wrong date, a referenced attachment that is not actually attached). Both can support a rescission claim, although courts are more cautious about purely formal defects where the vendor can show that the purchaser was not in fact misled.

Buyer rights if the Section 32 is defective

Section 32K of the Sale of Land Act gives the purchaser a right of rescission. The right is available at any time before settlement (and in some cases for a short period after, depending on the contract). On rescission, the contract is at an end, the deposit is returned and the purchaser walks away.

There is a vendor's protection — the vendor may resist rescission by showing that they acted honestly and reasonably in the matter and that the purchaser is substantially as well off as if the section had been complied with. Both limbs must be satisfied. The burden is on the vendor and Victorian courts have traditionally interpreted the protection narrowly.

In addition to statutory rescission, the purchaser may have causes of action in misrepresentation (under the Australian Consumer Law) and in negligence (where the statement has been negligently prepared). These are typically pursued after settlement, where rescission is no longer available, and can support a damages claim. Where disputes escalate to litigation, see our general note on letters of demand and the firm's litigation and dispute resolution service.

Role of conveyancers and property lawyers

The role of the vendor's lawyer or conveyancer is to:

• take instructions from the vendor about the property and any matters that may affect disclosure;
• order the underlying searches and certificates — title, plan, planning, rates, water, building surveyor, owners corporation, land tax;
• prepare a Section 32 statement that captures the statutory disclosure categories and attaches the supporting documents;
• prepare a contract of sale that reflects the agreed commercial terms;
• respond to enquiries from prospective purchasers' representatives;
• update the statement if circumstances change before signing; and
• conduct settlement on PEXA, including discharge of the existing mortgage and lodging of the transfer.

The role of the purchaser's lawyer or conveyancer is to review the Section 32 and contract, identify risks, advise the purchaser on the legal effect of the documents, recommend additional searches or special conditions, and conduct settlement. Our broader guides on buying property in Victoria and selling property in Victoria put the Section 32 in its broader transactional context, and the firm's conveyancing and property service explains how Parke Lawyers handles residential and commercial transactions for clients across Victoria.

Commercial buyers should also read our specific note on buying commercial property in Victoria, and any party concerned about long-standing possession or boundary disputes should consider our guide on adverse possession in Victoria. For complex transactions involving a corporate vendor or purchaser, the firm's commercial and business law team co-ordinates with the property team on cross-disciplinary issues. Reviews of this article and related Victorian property guides are managed by Julian McIntyre.

Practical checklist before signing

Before a purchaser signs, the following items should be confirmed:

1. the Section 32 has been received and reviewed by the purchaser's lawyer or conveyancer;
2. the title plan and lot dimensions match the property as marketed;
3. registered easements and covenants do not defeat the intended use;
4. the planning zone and overlays permit the intended use and any contemplated development;
5. recent works are supported by appropriate building and planning permits;
6. owner-builder works (if any) are supported by a defects report and warranty insurance;
7. owners corporation fees, special levies, insurance and minutes have been reviewed;
8. outgoings are within the purchaser's budget;
9. all attachments referenced in the body of the statement are actually attached; and
10. independent searches have been cross-checked against the disclosures.

For vendors, the equivalent checklist runs the other way — instruct the lawyer early, surface every issue that might affect disclosure, obtain current certificates, refresh the statement if circumstances change, and respond to purchaser enquiries promptly. Vendors and purchasers who treat the Section 32 as a substantive document — not a formality — minimise the risk of rescission and avoid the bulk of the disputes that affect Victorian property transactions.

Frequently Asked Questions