A vendor statement also referred to as a section 32 statement, is a legal statement of matters affecting the land being sold.
Usually prepared by a solicitor or conveyancer a vendor statement provides the required pre-contract disclosure to potential purchasers.
What Information does a Vendor Statement Contain?
The vendor’s disclosure obligations are set out under section 32 of the Sale of Land Act 1962.
Simply put the information relates to the land, including:
- Mortgages registered on title as well as unregistered mortgages,
- outgoings (for example, rates),
- insurance (if applicable),
- Easements, including unregistered easements,
- Agreements recorded on title,
- declaration if located in a bushfire-prone area,
- if there is access to the property by road,
- Planning schemes,
- Zoning and planning overlays,
- permits in the preceding 7 years,
- owner corporation information (if applicable),
- Growth Area Infrastructure Contribution (if applicable),
- Non-connected services,
- Evidence of title,
- Plan of subdivision,
- if the vendor is not the registered proprietor of the land or the owner of the estate in fee simple in the land, evidence of the vendor‘s right or power to sell the land.
This information may be given by being included in the vendor statement itself or by attaching certificates and documents to the vendor statement, or a combination of the two (which is the standard practice).
Further disclosure is required for staged subdivisions, terms contracts, and commercial/industrial land.
In addition to all of this information, a vendor is also required to disclose material facts to a purchaser.
When is a vendor statement given to a potential purchaser?
A vendor statement must be provided to the purchaser before a Contract of Sale of Real Estate is signed by the purchaser.
It is standard practice for a vendor statement signed by the vendors to be attached to the Contract of Sale. The purchaser will then sign the vendor statement at the time of putting in their offer and signing the Contract of Sale.
Non-disclosure, inaccurate and incomplete Vendor Statements
If a vendor provides false or misleading information (including the information contained in any of the certificates) or fails to supply a vendor statement then a purchaser may, under certain conditions, be able to withdraw from the Contract of Sale at any time up to the day of settlement.
It is vital the information in a vendor statement is complete and accurate. If there are any changes to the information in the vendor statement (such as a notice being issued) then the vendor statement should be updated before entering into a contract with a purchaser.
While some vendor statements are prepared with a bare minimum of supporting documentation this is not advisable and provides little protection to a vendor. From the purchaser’s perspective, questions may be raised regarding the completeness or accuracy of any of the information supplied by the vendor potentially costing you a sale.
When selling your biggest investment it is important to get the legal paperwork right and taking shortcuts can lead to problems. Whilst a vendor statement with full certificates will take longer and is more expensive to prepare the benefits substantially outweigh the costs and time needed.
Care Conveyancing engages in best practice in everything we do to ensure that the client receives the best level of protection possible. When it comes to preparing a vendor statement that means only preparing vendor statements with full supporting certificates and documentation.
To have your vendor statement professionally prepared contact Care Conveyancing.