The vendor’s statement is the one document a first home buyer is always given and almost never reads properly. It is not marketing material. It is a statutory disclosure, and most of the expensive surprises in a Victorian purchase are visible in it before you sign. Here is what to look for, in the order it usually appears.
The title, and what is on it
Start with the register search statement and the plan. You are checking three things: that the person selling is the registered proprietor; that the land is the shape and size you think it is; and what encumbrances are recorded. Easements are common and usually harmless (a drainage or sewerage easement along a boundary), but they restrict where you can build, and a carriageway easement means someone else has a right to cross your land. Restrictive covenants limit what can be built; a single dwelling covenant prevents a second dwelling or subdivision. If the property is in an owners corporation, the plan will show the lot and common property boundaries, which is how you find out the car space or courtyard you were shown is actually common property.
Building permits in the last seven years
The vendor must disclose building permits issued in the seven years before the sale for works requiring a registered builder, and provide owner-builder insurance details where relevant. This section is where you learn that the deck, the extension or the converted garage was done recently, or, by its absence, that it was not permitted at all. If you can see obvious recent work and there is no permit disclosed, ask the question in writing before you sign. Unpermitted work becomes your liability, and it will come back when you sell.
Notices, orders and proposals
The statement must disclose notices and orders affecting the property, and any notice of intention to acquire. This covers council orders to repair or demolish, building notices, and road widening or acquisition proposals. Read this section slowly. A disclosed building notice is a live obligation you are inheriting.
Outgoings
Rates, water, owners corporation fees and land tax are disclosed so you can budget and so they can be adjusted at settlement. Two things to check: whether land tax is disclosed at a level suggesting the property has been an investment (relevant to adjustments), and whether owners corporation fees are current or an estimate. For an apartment, the owners corporation certificate is where the real information is: funds held, planned works, special levies, insurance and any litigation the owners corporation is involved in. A healthy maintenance fund and a boring history is what you want to see.
Services
The statement discloses which services are connected: electricity, gas, water, sewerage, telephone. On established suburban properties this is routine. On rural, semi-rural and newly subdivided land it is not. An unconnected service can cost tens of thousands to bring in, and septic systems carry their own approval and maintenance obligations.
Planning information
The zone and any overlays are disclosed. Even if you have no development plans, this tells you what can be built next door, whether the property is flood or bushfire prone, and whether a heritage overlay will control any future renovation. See our article on covenants, overlays and development potential for how to read this properly.
Red flags worth stopping for
- An owners corporation certificate showing a special levy, planned major works or a low maintenance fund. You inherit the liability from settlement.
- Combustible cladding on an apartment building, or any reference to a cladding rectification program.
- A section 173 agreement, an agreement with the council registered on title, which can restrict use, further development or impose ongoing obligations.
- Recent works with no permit disclosed, or an owner-builder warranty with insurance that is about to expire.
- A caveat or a mortgage the vendor must discharge: normal, but it needs to be dealt with at settlement, and a caveat by a third party can complicate matters.
- Any reference to a dispute, whether with a neighbour over a boundary or within an owners corporation.
What the Section 32 does not tell you
It is a disclosure document, not a condition report. It says nothing about whether the roof leaks, the stumps have moved, there is asbestos in the eaves or the drains are failing. That is what a building and pest inspection is for, and it is a separate exercise you must commission yourself. It also does not tell you whether the price is reasonable. Read together (statement, contract, inspection), you have the full picture. Any one alone is a partial view.
The practical sequence
- Ask the agent for the Section 32 and contract as soon as you are seriously interested. They must provide them.
- Send both to your lawyer or conveyancer before you sign or bid.
- Commission a building and pest inspection, or for an apartment, read the owners corporation records.
- Raise questions in writing with the agent, and get answers in writing.
- If you are buying at a private sale, negotiate any special conditions before signing; if at auction, before the day.
We review Section 32 statements and contracts for first home buyers across Melbourne, usually within a business day or two, with our fees disclosed before you engage us. Book a free first consultation.
Frequently asked questions
How long do I have to review the Section 32?
There is no minimum period, but the vendor must give it to you before you sign. In practice you should ask for it as soon as you are interested, which for an auction property means the week before, not the morning of. A proper review takes a day or two.
What happens if the vendor’s statement is wrong or incomplete?
If it fails to disclose something material and you have not yet settled, you may have a right to rescind the contract under the Sale of Land Act. The remedy depends on the nature of the defect and whether the vendor acted honestly and reasonably, so get advice quickly. The right can be lost once settlement occurs.
Do I still need a building inspection if the Section 32 looks clean?
Yes. The vendor’s statement discloses legal and administrative matters, not the physical condition of the building. A clean statement tells you nothing about stumps, roof, wiring, drainage or pests.