Section 32 Vendor Statement Explained

If you are buying or selling under conveyancing arrangements in Victoria, you will come across the term Section 32 early in the process. Named after the section of the Sale of Land Act that requires it, a Section 32 statement is the vendor's formal disclosure document, and it has to be handed to a prospective buyer before they sign anything, as outlined by Consumer Affairs Victoria. For anyone working through a residential sale in Victoria, getting this document right is one of the most important early steps in the entire transaction.

What a Section 32 Must Contain

A properly prepared Section 32 sets out the legal and physical details a buyer needs to make an informed decision. At a minimum it should include full title details confirming the registered owner and the legal description of the land, along with any restrictions such as covenants or easements affecting the property. It must disclose the zoning that applies under the relevant planning scheme, since this affects what a buyer can and cannot do with the land in future. Outgoings such as council rates, water charges and owners corporation fees need to be listed, along with details of any mortgages or caveats currently registered against the title.

Where relevant, the statement must also disclose building permits issued in the past seven years, notices or orders affecting the property from authorities such as the council, and, if the property is part of a strata or unit development, information about the owners corporation including any current or pending fees and disputes. If there is an owners corporation involved, the statement usually needs to attach a certificate confirming its financial position, which buyers should read carefully before proceeding.

Common Problems in a Poorly Prepared Statement

The most frequent issues seen in Section 32 statements are missing or outdated title searches, incomplete owners corporation certificates, and outgoings figures that have not been updated to reflect the current rating year. Easements or covenants are sometimes omitted entirely if the person preparing the statement has not ordered a full and current title search, which can create a real problem later if a buyer's own title search turns up something the vendor statement did not mention. Building permit information is another area where statements are frequently incomplete, particularly for older homes where renovation records were not kept carefully.

A statement that omits required information, or that contains a materially false or misleading disclosure, can give a buyer grounds to rescind the contract even after signing, which is a significant risk for a vendor. This is why it makes sense to have a conveyancer prepare or carefully review the Section 32 before a property goes to market, rather than relying on a template filled in without proper searches.

Why Timing Matters

Unlike some disclosure obligations that only need to be met before settlement, the Section 32 must be given to a buyer before they sign the contract, not afterwards. A contract signed without a valid Section 32 having been provided is generally not binding on the buyer, and they may be entitled to walk away. For sellers, this means the statement needs to be finished and checked well before the property is listed, so that a serious buyer can be handed a complete document the moment they are ready to make an offer.

For buyers planning a residential purchase, it is worth reading the Section 32 in full and having your own conveyancer review it rather than skimming it under time pressure at an open home. If anything in the statement seems inconsistent with what you were told, or with what a Melbourne based agent has said about the property, it is worth raising it directly with your conveyancer before you commit.

How It Relates to Caveats and Notices

Because the Section 32 must disclose registered mortgages and caveats, it gives buyers an early warning of any competing interest in the title. If you come across a reference to a caveat on the property in the statement, this needs to be investigated and resolved, usually by the vendor's conveyancer, before settlement can proceed cleanly. Similarly, any outstanding notices from council or other authorities disclosed in the statement should be addressed or at least clearly understood before you sign, since they can affect the value or usability of the property you are buying.

What Buyers Should Do With the Statement

Receiving a Section 32 is not the end of a buyer's due diligence, it is the start of it. The statement tells you what the vendor is required to disclose, but it does not replace your own independent checks. A buyer's conveyancer will typically still order a fresh title search and confirm the outgoings figures, the planning zone, and any owners corporation information against what the statement claims, rather than accepting it at face value. This matters because responsibility for a mistake in the statement generally sits with the vendor, but discovering that mistake after settlement is far more stressful, and sometimes far more costly to fix, than catching it beforehand.

It is also worth reading the attached documents, not just the summary pages. Full copies of the title, plan, and any owners corporation certificate are usually annexed to the statement, and the detail in these attachments is often where a genuine issue is found, such as a special levy raised by an owners corporation or a covenant that restricts renovations.

Getting the Statement Right the First Time

Whether you are selling a home in Victoria or buying one, a well prepared Section 32 backed by current searches protects both sides of the transaction and reduces the risk of disputes later. It is not a document to rush, and it is one of the clearest examples of why engaging a conveyancer early, before a property is even listed, tends to pay off. A vendor who invests the time to get the statement right at the outset generally ends up with a smoother path to settlement and fewer questions to field once a buyer is under contract.