Conveyancing in transition: Risk trends and reform in Victoria

Each year the LPLC receives claims from practitioners who prepared defective section 32 statements which caused their vendor clients to suffer loss. This is because a defective section 32 statement entitles a purchaser to terminate the contract of sale of land at any time before settlement. Almost all of these claims were preventable.

Preparing a compliant section 32 statement takes legal knowledge, current resources and disciplined systems. This guide sets out the disclosure obligations under the Sale of Land Act 1962 (Vic) (SL Act) section by section, maps each obligation to the standard Law Institute of Victoria (LIV) section 32 statement, and gives a practical step for each one. It finishes with some suggested checks to run before the statement is signed.

A purchaser can walk away from the sale at any time before completion if the owners corporation does not hold the required common property insurance. The risk is highest in small subdivisions that have never met and look dormant. Practitioners acting for vendors should consider the insurance position for all properties that have common property before the section 32 statement is prepared.

This guide covers the disclosure obligations under the Sale of Land Act 1962 (Vic) (SL Act) when a vendor is selling a lot in a subdivision regulated by the Owners Corporations Act 2006 (Vic) (OC Act).

Since 1 July 2024, every section 32 statement in Victoria must carry new disclosures about the commercial and industrial property tax (CIPT). This applies to residential land too, not only commercial and industrial land.

Get the disclosure wrong and the purchaser can terminate the contract at any time before settlement. The vendor may also commit an offence.

Acting for a purchaser carries a different risk, because a purchaser needs to be aware whether the transaction will bring the property within the CIPT regime, whether the property is already within the CIPT regime, and if and when the CIPT annual tax will commence.