The section 32 is a document provided by the seller of real estate (vendor) to an intending purchaser.
In general terms, if the vendor fails to provide the information required by the Act before the contract is signed, the purchaser will be able to cancel the contract. Of course, there are exceptions to this rule, and purchasers should not assume that any 'technicality' will allow them to end the contract.
Before a contract is signed is the best time to get legal advice from a qualified lawyer, as the opportunities to end the contract can be severely limited if legal advice is sought after the sale has been finalised.
In recent years, the information required in a section 32 has been expanded and extended. Interpretation of the section 32 requirements, particularly those relating to building works undertaken by an 'owner-builder', can be quite confusing. In addition, failure to comply with some of the rules can attract huge monetary penalties.
The vendor's name/s will be included in the section 32. But it is often the case that the person selling the property is not actually the owner of the property.
It is important to check that the person selling the property is entitled to do so. The first document to check is the certificate of title. If the names appearing on the Certificate of Title are different to the vendors, then further checks are made to verify the vendor’s right to sell. There may a power of attorney, or a grant of probate included in the section 32. If not, then further investigations will be required.
Remember, many section 32's are prepared by unqualified conveyancers who are not aware of the investigations needed to ensure that the vendor is entitled to sell, or the legal documents required to give the vendor authority to sell.
The Section 32 will also identify WHAT is being offered for sale.
You may have been shown a block of land by the agent, but is it the same block of land described in the section 32? What if the agent has given you the wrong section 32?
The certificate of title contained in the section 32 will include a detailed description of the property for sale. In most cases the section 32 will reference a lot, and the plan of subdivision on which the lot appears.
It is important to confirm that the land 'on the ground' corresponds with the lot described in the section 32. This means checking that the dimensions of the lot, as described in the plan of subdivision, are the same 'on the ground' and that the fences are standing on their correct boundaries.
The following is a list of the basic information found in a section 32. Further information may be required - it depends on the property being sold. (Remember, legal advice from a qualified lawyer should always be sought regarding the information contained in the section 32, and what information should be included).
- statutory warnings to the purchaser
- vendor’s details
- title details
- information regarding building permits issued in the past 7 years
- particulars of owner-builder warranty insurance
- if the vendor is the owner-builder who completed building works there should be a written inspection report (which lists any defects) in the section 32
- particulars of any mortgages or 'charges' over the land (i.e. debts charged against the land)
- information regarding covenants, easements and any other restrictions on title (whether or not they appear on the title)
- planning information, particularly where zoning restricts land use
- information regarding outgoings payable by the owner of the property
- disclosure of any notices or orders issued by the authorities, regarding fencing, road-widening, sewerage etc.
- if there is access to the property by road and what category of road is provided eg access vs formed
- information on services connected to the property.
Once you and your solicitor/conveyance agent have read and understood the section 32 statement it is highly recommended that you organize for a pre-purchase inspection and termite/pest inspection to be carried out on the property.
Make sure the companies that you select have indemnity insurance.