What is a Section 32 Statement?

Written by realestateview.com.au in Buying

A woman hidden behind a pile of books signifying the confusion behind a section 32 statement

One of the most overlooked but underestimated parts of the purchasing process in real estate is the Section 32 Statement. New home owners have often never heard of one, or blindly sign the contract of sale without giving the Section 32 a proper look-over. But whether you are buying a home in the city or rural property, you will at some point come face to face with a Section 32 Statement. Get your head around this piece of legislation to make sure your investment in a property doesn’t result in any nasty surprises.

Why does a Section 32 Statement exist?

As part of the Sale of Land Act, a Section 32 Statement is intended to provide a purchaser with relevant information that may affect their decision to sign a contract of sale. It is important to remember that a Section 32 Statement is not a contract of sale. People sometimes confuse these two, but they are separate to each other and the signing of a contract of sale is dependent on a Section 32 having been already provided.

When does a buyer receive a Section 32?

Before a contract of sale is signed. A vendor’s lawyer will often provide their real estate agent with the Section 32 Statement, who will in turn provide it to any potential buyers and their lawyer.

The only signature that needs to be on it is the vendor’s, however, a real estate agent may insist that a potential buyer signs the statement as proof of the agent’s role in providing the statement to any potential buyers.

Note: in some cases, a sale of contract will state that the legitimacy of the contract is depended on the subsequent approval of a Section 32 Statement. In this case, the contract of sale is compromised and a buyer has the freedom to cancel their contract.

A signed housing contract that required a Section 32 statement.

Check out our ultimate property guide for first home buyers

What is inside a Section 32 Statement and what should you look out for?

Before you go perusing this sometimes-complicated piece of legislation, seek the advice of your lawyer. They will have experience in how to read a Section 32 Statement and how to approach the process. Your lawyer can help you identify what is inside the statement, how accurate it is, and most importantly: what is missing?

A Section 32 will often include:

  1.  Vendor’s details
  2.  Details of the title. This is a very important part of the statement and requires your attention.
    Note: check the measurements of the property within the title vs. what you think you are buying. If it is a subdivided property especially, are you getting what you think you are?
  3.  Information regarding building permits for recent renovations to the property.
    Note: if there have been renovations and permits and insurance information is not included in the Section 32 then ask yourself, why not?
  4.  Zoning information. Be sure that you are aware of whether it is a commercial or residential zone and what sort of residential zone it is.
  5.  Notices of any upcoming works or orders issued by authorities. This is important in case of changes to the area that may affect you.
  6.  Outgoings: these can include rates and body corporate/strata fees.
  7.  Easements: these are areas of your land that someone else has the right to use for a specific purpose, even if they aren’t the landowner. This is most common in the form of drainage. Be aware of these easements as they may affect/compromise any renovations you have planned.

Things to remember

Conducting a private sale? As the vendor, you still need to provide a Section 32 Statement. Have your lawyer compile this for you to provide to either the potential buyer or their lawyer.

If a Section 32 Statement contains incorrect information, this can allow a buyer to withdraw from the sale of the property and can even result in legal action.