Can I Make an Offer for a Property Without Section 32?

Section 32 contains pertinent information a property buyer needs to make an informed decision before making a formal offer or signing a contract. You can express interest in purchasing the property without this important document. However, it is always best to wait for Section 32 and review it thoroughly before proceeding.

What is in Section 32 that makes it very important? Also, what happens if you place an offer on a property without it?

What is Section 32 and Why Is It Important?

A Section 32 or vendor’s statement is a legal declaration of specific details about the property. Crucial aspects of a comprehensive Section 32 statement include:

• property title, establishing the seller’s legal ownership and right to sell
• zoning information, outlining any restrictions or allowed activities that may affect property use
• services connected to the property, like water, gas, electricity, and sewerage
• taxes, debts, or charges associated with the property
• building permits to ensure legal approval of any recent construction work or renovation
• easements or covenants that may affect planned renovations or property use

Prospective buyers should ask for and review the Section 32 statement to complete their due diligence.

Some features of the property are not evident during an inspection. With the vendor statement, you’ll uncover hidden issues, restrictions, or liabilities that may affect your ownership or use of the property.

The Section 32 document is like a shield protecting you from any problems or potential issues that may crop up after buying the property. It’s a short-formed version of a due diligence.

As a precaution, potential buyers should then review the statement with their property lawyer or licensed conveyancer to ensure accuracy and clarity.

Do All Properties in Victoria Require a Section 32 Statement?

All buyers in Victoria should receive a Section 32 or vendor’s statement, whether to purchase land, house, apartment, or properties not for residential use.

Sellers should also prepare this document for properties sold privately. The location does not matter, either. Properties in rural, regional, or metropolitan areas will still have an accompanying Section 32 document.

A legal professional prepares the Section 32 statement once the real estate agent lists the property on the market. That way, prospective buyers can access and review the document upfront.

What Happens If You Make an Offer Without a Section 32?

It won’t potentially be binding and can be potentially reneged.

The property buyer should see and review the vendor statement before making a formal offer or signing the contract of sale.

However, some first-time buyers may not know about Section 32 and would proceed with the offer or sale without this document.

Not knowing the crucial details and potential deal-breakers of the property will likely lead to problems and unpleasant surprises down the line.

Making verbal offers without seeing Section 32 first may also encourage some agents to create a false sense of competition, forcing you to act quickly without thinking decisions through.

These scenarios emphasise why potential buyers should put Section 32 at the top of their checklist. Also, it is not enough to receive this document. Thorough verification of its contents is a must.

With your legal representative’s guidance, you can review the document to request any amendments or decide if you want to make an offer.

Also, if you find incorrect, incomplete, or deceiving information in the statement, you can still withdraw from the property sale, seek compensation, or, in some cases, take legal action.

However, doing this once after contract signing can be problematic due to limited negotiating power.

What Can Buyers Do If a Section 32 is Not Yet Ready?

It generally takes about 2 weeks to prepare the section 32. That’s why sometimes a contract can be ready, but a section 32 isn’t. Most of the section 32 (vendor’s statement) comprises searches from their parties and the longest is usually the land tax search and owner’s corporation searches.

Some buyers will tell their agents they are ready to make an offer as soon as they receive the Section 32 statement. Others will ask the agents to notify them immediately once the document is available.

Still, some buyers will offer a small holding deposit to ensure the agent won’t sell the property to others while waiting for Section 32 to be ready.

While there are several strategies to secure the property you want to buy, the safest and best approach is to wait for the Section 32 document and have a lawyer help you review it before making an offer.

No matter how impressive a property may be, always exercise caution and protect your interests.

Review Your Section 32 Statement to Avoid Risks

Purchasing a property in Victoria without the Section 32 is not ideal. As a potential buyer, reviewing this document is part of doing due diligence and a way to protect yourself.

Understanding and verifying the vendor’s statement, however, can be challenging. If you need assistance, reach out to TNS Lawyers today. Call +61 3 9052 3214 or email us at info@tnslawyers.com.au to ensure a problem-free property transaction.