Every year LPLC sees conveyancing claims where the cause of the claim is defective section 32 disclosure. To properly advise clients practitioners need to understand the vendor disclosure obligations in the Sale of Land Act 1962 (Vic).
Reviewing relevant cases, attending seminars about conveyancing and reading relevant texts are other things practitioners can do to increase their knowledge.
Defective disclosure case
In McHutchison v Asli [2017] VSC 258 the vendor’s conveyancer recorded in the section 32 statement that sewerage was ‘connected’ to the property.
Section 32H of the Sale of Land Act 1962 (Vic) requires a vendor to state which services are ‘not connected’.
The property was serviced by a septic tank so the section 32 statement should have provided that sewerage was ‘not connected’.
Justice Digby was not convinced the vendor acted honestly and reasonably, and orders were made for the return of the deposit with the vendor to pay the purchaser’s legal costs.
The LPLC LIJ article from October 2014 Old claims, new laws contains details of a claim where the same error was made by a practitioner.
To avoid these basic mistakes firms need to ask their vendor clients the right questions and explain to them the difference between mains sewer connection and septic tank use. See our Sale of land – questions for vendors.
It also helps if firms are using the most up to date precedents so that the information is properly disclosed. The pre-October 2014 LIV form of the section 32 statement required a vendor to state whether a service was connected or not and where connected, to provide the name of the authority in accordance with section 32H of the Sale of Land Act. The current LIV form asks the vendor to state which of the services are not connected.
