Section 32 and Contract of Sale Explained — Victoria
In Victoria, every vendor must provide a Section 32 (Vendor's Statement) before any contract is signed. This document is your primary source of legal disclosure about the property — its title, planning status, building permits, owners corporation obligations, and more. This guide explains what it contains, what to check, and the red flags that warrant further investigation. This guide covers Victoria only — other states have different disclosure processes.
The Section 32 (Vendor's Statement) is a legal requirement under the Sale of Land Act 1962 (Vic). This obligation applies only in Victoria. If you are purchasing property in another state, your conveyancer will explain the applicable disclosure requirements in that jurisdiction.
What is a Section 32?
A Section 32 is a statutory disclosure document that the vendor must provide before you sign any contract of sale. It is named after Section 32 of the Sale of Land Act 1962 (Vic). The document discloses material facts about the property that you, as the buyer, are legally entitled to know before committing.
If a vendor provides an incomplete or materially false Section 32, the buyer may be able to rescind (cancel) the contract and recover their deposit — even after exchange.
You should receive the Section 32 before you make an offer or attend an auction. For private treaty purchases, ask the agent for it as soon as you are seriously considering the property.
Section 32 vs contract of sale — the difference
- →Disclosure document prepared by the vendor
- →Discloses material facts about the property
- →Not a binding agreement — it informs your decision
- →Must be provided before the contract is signed
- →The binding purchase agreement
- →Records price, settlement date, deposit, conditions
- →Legally binding on both parties at exchange
- →Reviewed by your conveyancer before you sign
What the Section 32 contains
A standard Section 32 contains all of the following disclosures. Each section requires review — not just a skim.
- →Title search — registered owner, mortgages, caveats, encumbrances
- →Owners corporation (strata) disclosure — levies, sinking fund, committee history
- →Zoning and planning information — zone, overlays, any planning notices
- →Easements and covenants — rights-of-way, drainage easements, building covenants
- →Building permits — any permits issued in the last 7 years
- →Notices from authorities — council, VicRoads, water authority
- →Outgoings — council rates, water, land tax position
- →Services — gas, electricity, water, sewage connections
What to check before you sign — component by component
You do not need to understand every legal term in the Section 32 — but your conveyancer does. Use this table to know what questions to ask and what answers should concern you.
| Component | What to check | Red flag |
|---|---|---|
| Title and ownership | Is the vendor the registered owner? Are there any mortgages, caveats, or encumbrances on the title? | A caveat from a third party — ask your solicitor to investigate the nature of the claim before proceeding. |
| Owners corporation disclosure | Is there an owners corporation (OC)? What are the annual levies? What is the sinking fund balance? | Low levies combined with a low sinking fund balance — this is a risk of a special levy being raised for building repairs or capital works. |
| Zoning and planning | What zone is the property in? Are there any planning overlays (heritage, flood, bushfire, vegetation)? | A heritage or flood overlay that would restrict your ability to renovate, extend, or develop the property. |
| Easements and covenants | Are there any easements (right-of-way, drainage, services) or restrictive covenants affecting the property? | An easement running through the rear yard or under a proposed extension location — this may significantly limit what you can build. |
| Building permits | Have any building permits been issued? Are they completed and signed off with a Certificate of Final Inspection? | A permit issued but never inspected or signed off — this indicates potentially unlicensed or non-compliant works that may be your liability as the new owner. |
| Outgoings | What are the council rates, water rates, and is there a land tax liability? | An unexpected land tax liability — this can arise where the vendor held multiple properties and the tax is assessed on combined holdings. |
| Notices from authorities | Has the vendor received any notices from council, VicRoads, or other authorities regarding the property? | A compulsory acquisition notice or road widening proposal — this directly affects the property's future value and use. |
| Services | Are gas, electricity, water, and sewage connected? Is the property on town water and sewage? | A property not connected to sewage with an old septic system — this can involve significant upgrade costs. |
How to read it — practical approach
Request the Section 32 from the agent as soon as you are seriously considering the property. Send it to your conveyancer or solicitor immediately. Ask them to review it and report back within 2–3 business days.
When your conveyancer reports, ask specifically about:
- →Any caveat on the title — what is the nature of the claim and can it be discharged before settlement?
- →If there is an owners corporation, what is the sinking fund balance per lot — below $10,000 per lot is a common indicator of depletion
- →Any building permit that was issued but has no Certificate of Final Inspection — this indicates works that were never signed off
- →Any planning overlay that would affect your intended use (particularly heritage, bushfire, or flood overlays)
Common issues found in Section 32 documents
Building permits were issued for a renovation or extension, but the work was never inspected or signed off. As the new owner, you may be liable for bringing the work up to standard. Always ask your conveyancer to check permit status.
The OC sinking fund has a very low balance. If a major repair is needed (roof, lift, common area works), a special levy will be raised — meaning you will pay a lump sum on top of regular levies after you move in.
A heritage overlay restricts what you can alter, add, or demolish. If you are buying with renovation plans, review this carefully — heritage properties often require council approval for changes that would otherwise be exempt.
A party other than the vendor's lender has lodged a caveat. This must be investigated and discharged before settlement. The nature of the claim determines how serious this is — your solicitor needs to assess it.
Timeline for Section 32 review
Agents sometimes pressure buyers to sign quickly — particularly before auction or in competitive markets. No legitimate legal concern requires you to sign a contract without having reviewed the Section 32. If you feel pressured to sign without review, that is a reason to be more cautious, not less.