Vendor Statement (Section 32 / s149)

What Is a Vendor Statement (Section 32 / s149)?

A Vendor Statement is a legal document that provides essential information about a property to a potential buyer. In Australia, the requirements for this document vary depending on which state or territory you are in. While many people refer to it as a "Section 32" or "s149," these terms refer specifically to the legislation in Victoria and New South Wales respectively.

At its core, this document is designed to ensure the buyer knows exactly what they are purchasing. It covers the legal title, zoning restrictions, any outstanding charges, and the physical condition of the building. It is a fundamental part of the conveyancing process. If you are selling land, you generally cannot rely on verbal disclosures or a standard contract alone. The law requires you to produce a written statement that satisfies specific regulatory standards.

If you are a business owner selling a commercial property, or a tradie selling an investment property, this document is mandatory. It is distinct from a Business Sale Agreement, which covers the sale of assets like tools, goodwill, and intellectual property. If your sale includes land, the Vendor Statement takes precedence regarding the real estate component.

When to Use This Document

You must use this document whenever you are selling real estate in Australia. This includes vacant land, residential houses, commercial units, and rural properties. The timing of when the buyer receives this document is critical. In most jurisdictions, the document must be provided to the buyer before they sign the contract of sale.

Residential Property Sales

For a standard home sale, the Vendor Statement is usually prepared by the seller's conveyancer or solicitor as soon as the property is listed for sale. It is attached to the contract so prospective buyers can review it before making an offer.

Commercial Property Sales

Commercial sales operate under similar rules. If you are selling a warehouse, an office, or a retail space, you must disclose the same title and zoning details. Commercial leases and any tenant occupancy details often form part of the broader disclosure process, though the specific requirements for tenant disclosure vary by state.

Business Sales Including Land

This is a common point of confusion for business owners. If you are selling your plumbing business and you own the workshop, you have two distinct sales occurring. You are selling the business assets (the vans, the tools, the client list) and you are selling the land. The Vendor Statement is required for the land component. If you are selling the business but renting the premises, you generally do not need a Vendor Statement, though you may need a Lease Disclosure Statement.

Buying "Off the Plan"

If you are a developer selling properties that have not yet been built, specific disclosure laws apply. You must provide a Vendor Statement that includes draft plans, specifications, and details of the sunset clause. These are highly regulated documents with strict deadlines for issuance.

Key Sections and Required Elements

While the specific headings change from state to state, the core information required in a Vendor Statement remains consistent. The goal is to paint a clear picture of the property's legal and physical status.

Title and Ownership Details

This section confirms who owns the property and how it is held. It includes the full names of the vendors as they appear on the title. It also lists the proprietary identifier, such as the Volume and Folio number or the Torrens title reference. You must also disclose any encumbrances on the title. These are third-party interests that affect the land, such as mortgages, easements, or caveats. A mortgage is usually discharged at settlement, but an easement (like a right of way for the neighbour) remains.

Zoning and Planning Information

Buyers need to know what they can legally do with the land. This section details the local council zoning. For example, is the land zoned "Residential A" or "General Industrial"? It must also outline any planning overlays that affect the land. In Victoria, this might include a Bushfire Overlay or a Heritage Overlay. In New South Wales, the s149 Certificate provides this specific data.

Outgoings and Rates

This section lists the council rates, water rates, and land tax (if applicable) that are currently paid on the property. It shows the amount owing and the rating period. This allows the buyer to see the ongoing holding costs of the property. If there is a discrepancy in these figures, it can lead to adjustments at settlement.

Building and Warranties

If the property includes a dwelling, you must disclose details of building permits issued in the last seven years (in Victoria) or details of insurance (e.g., Home Building Compensation Fund in NSW). If you have renovated the property without a permit, this can create significant legal issues.

Notices and Orders

You must disclose any notices or orders issued by government authorities. This includes compliance notices from the local council regarding overgrown trees or illegal structures, as well as notices from the water authority regarding sewer issues. If there is a proposed road widening that will take half the front yard, it must be listed here.

Services Connected

This is a practical checklist of which utilities are connected to the property. It includes electricity, gas, water, telephone, and sewer. In some states, you must also disclose if the property is connected to non-mains services, such as a rainwater tank or septic system.

How to Write a Vendor Statement (Section 32 / s149) (Step by Step)

Given the legal complexity, most sellers engage a professional to draft this document. However, understanding the steps helps you manage the process and ensure your conveyancer has the correct information.

Step 1: Gather Your Documents

Before you can draft the statement, you need the raw data. You will need a copy of the Certificate of Title. You can obtain this from the land titles office in your state. If you have a mortgage on the property, you will need details of the loan account to discharge it. Gather your most recent council rates notice and water rates notice.

Step 2: Order the Required Searches

Your conveyancer will order a series of official certificates. In NSW, the most critical is the s149 Planning Certificate from the local council. In Victoria, you need a Land Certificate and various planning certificates. If you are in a strata scheme, you need the strata records. These searches form the evidence base for your Vendor Statement. You cannot simply fill out the form from memory; the authorities must verify the information.

Step 3: Complete the Property Specifics

While the searches provide the government data, you must provide the "human" data. This includes details of building permits you have obtained, any insurance claims you have made (like flood or storm damage), and details of any leases or tenancy agreements. Be thorough here. If you know the roof leaks during heavy rain, this is the time to disclose it if your state requires disclosure of material facts.

Step 4: Draft the Statement

Using the state-specific template, insert the data from the searches and your personal knowledge. In Victoria, you use the prescribed Section 32 form. In South Australia, you use Form 1. Ensure you answer every question. If a section does not apply, mark it as "N/A" rather than leaving it blank.

Step 5: Review and Verify

Check the document for spelling errors in the property address and your name. These sound trivial, but in Victoria, a misspelt name or an incorrect title reference can technically allow the buyer to rescind the contract. Verify that the zoning description matches the certificate exactly.

Step 6: Serve the Document

Once the document is ready, it must be attached to the Contract of Sale. Do not let a buyer sign the contract before they have received the Vendor Statement. The "contract" is not considered validly formed until this exchange of documents occurs.

Common Mistakes to Avoid

Errors in a Vendor Statement are the leading cause of property settlements falling through. Here are the pitfalls to watch out for.

Relying on Old Certificates

Certificates have a shelf life. A planning certificate that is six months old may not reflect a recent change to council zoning laws. In NSW and Victoria, certificates older than three months are often considered "stale." If you try to use an old Vendor Statement from a previous sale attempt that fell through, you are taking a huge risk.

Omitting "Material Facts"

In Queensland and Western Australia, the concept of "material facts" is broad. A material fact is anything that would influence a reasonable buyer's decision. This could include a history of violent crime on the premises, significant structural damage, or noisy neighbours. Failing to disclose these can lead to lawsuits for misleading or deceptive conduct under Australian Consumer Law.

Incomplete Building History

If you extended the deck or added a carport, did you get a permit? If you did not, you must decide whether to disclose the lack of permit. While admitting to unpermitted work is difficult, failing to disclose it when asked about building works is fraud. If you did get a permit, you must include the details. Forgetting to list a minor bathroom reno can cause issues later if the buyer discovers it and claims you hid it.

Ignoring Easements

An easement is a right held by someone else to use part of your land. A common example is a water authority easement running through the backyard where pipes are buried. If you build a shed over this easement without council approval, the authority has the right to knock the shed down. If you do not disclose the easement, the buyer may sue you for the cost of relocating the shed.

Legal Considerations (AU)

The legal framework for Vendor Statements is complex because it is state-based legislation. There is no single federal law that covers this area. However, federal laws regarding consumer protection still apply.

Contract Rescission

The most significant legal risk is the buyer's right to rescind. In Victoria, if the Section 32 statement is missing a required item, contains an error that is "material," or is not signed by the vendor, the buyer can legally walk away from the deal. This can happen at any time before settlement, even if they have already paid a deposit. This places the seller in a difficult position, often forcing them to relaunch the sale in a weaker market.

Australian Consumer Law

The Competition and Consumer Act 2010 applies to all property sales. Section 18 of this Act prohibits misleading or deceptive conduct. A Vendor Statement is not just a form; it is a representation. If the statement says the property is connected to sewerage but it is actually connected to a septic tank, you have breached the Act. This applies even if you made an honest mistake. Buyers can claim damages for losses suffered as a result of the misrepresentation.

Statutory Warranties

In some states, the Vendor Statement includes warranties that the seller makes to the buyer. In South Australia, for instance, the Form 1 includes warranties that the property will be vacant at settlement and that the chattels listed are in working order. Breaching these warranties can result in financial penalties.

Duty of Care

Sellers have a duty of care to ensure the information they provide is accurate. While you are not expected to be a lawyer, you are expected to take reasonable steps to verify the information. Relying on the advice of a qualified conveyancer is your best defence against claims of negligence.

Variation by State

Always check the specific legislation for your location.

• Victoria: Sale of Land Act 1962. Strict checklist.
• New South Wales: Conveyancing Act 1919 and Environmental Planning and Assessment Act 1979. Focuses on the Contract and s149 Certificate.
• Queensland: Property Law Act 1974. Focuses on "Warning Statements" and material facts.
• South Australia: Land and Business (Sale and Conveyancing) Act 1994. Form 1 is comprehensive.
• Western Australia: Property Law Act 1969. Less prescriptive, but buyer beware principles apply.
• ACT: Civil Law (Property) Act 2006. Requires a specific Disclosure Statement.

Frequently Asked Questions (preview)

Do I need a lawyer to write a Vendor Statement? While it is possible to write one yourself using templates, the risk of error is high. A single missing detail can allow the buyer to cancel the contract. Most sellers hire a conveyancer or solicitor to draft it.

What happens if I find an error after the buyer has signed? If you discover an error, you must disclose it to the buyer immediately. You cannot wait until settlement. Failing to correct a known error is worse than making the mistake in the first place.

How long does a Vendor Statement last? The statement is valid for the specific transaction. If the sale falls through and you find a new buyer three months later, you will likely need to update the searches and the statement. Certificates often expire after three to six months.

Is a Vendor Statement required for an auction? Yes. In Victoria, you must provide the Section 32 statement to anyone who requests it before the auction. In other states, the equivalent documents must be available before the auction takes place.

Does a Vendor Statement cover the sale of a business? Only the real estate part. If you are selling a cafe, the Vendor Statement covers the building and land. The value of the business name, the coffee machine, and the fixtures is covered by a separate Business Sale Agreement.

Can I use a digital Vendor Statement? Yes. Electronic conveyancing is now standard in Australia. Documents can be signed and exchanged digitally via platforms like PEXA or DocuSign, provided they meet the witnessing requirements of your state.