What to Check in a Section 32 Victoria: A First Home Buyer's Guide

The Section 32 Vendor's Statement is the legal foundation of every residential property sale in Victoria. Governed by the Sale of Land Act 1962, it is the document a vendor must provide to a prospective buyer before any contract of sale is signed. Most first home buyers receive it, glance at it, and hand it to a conveyancer. That is the right call — but only if you know what you are asking your conveyancer to look for.

Here is what actually matters in a Section 32, and the specific red flags that can cost you tens of thousands of dollars if you miss them.

Why the Section 32 Exists

A physical property inspection can tell you whether there is a crack in the wall. It cannot tell you whether there is a drainage easement running across the back of the property that prevents you from building a pool. It cannot tell you that a building extension was constructed without a permit. It cannot tell you that the Owners Corporation is planning a $50,000 special levy in the next financial year.

The Section 32 is designed to expose risks that are invisible from the street. The vendor is legally obligated to disclose known material information. A materially incomplete or inaccurate Section 32 gives the buyer the right to rescind the contract without penalty prior to settlement — which tells you something about how seriously the legislation treats these obligations.

Under Section 12(d) of the Sale of Land Act, real estate agents and vendors who knowingly conceal material facts face fines exceeding $19,000 or up to 12 months imprisonment. The law takes non-disclosure seriously, which means a complete, honest Section 32 is in the vendor's interests as much as yours.

What the Section 32 Must Contain

A compliant Section 32 for a standard residential property must include:

Register Search Statement. Proof of ownership, plus any registered encumbrances — mortgages, caveats, and notices. You need to confirm the vendor actually owns the property they are selling and that there are no caveats that could block the transfer.

Plan of Subdivision. The official plan showing boundaries, lot dimensions, easements, and common property. This is where you see what is legally your land versus the land of others.

Easements and restrictive covenants. These must be disclosed on the Plan of Subdivision and in supporting documentation. An easement is a right another party has over your land — a subterranean water pipe, a shared driveway, a drainage channel. A restrictive covenant restricts what you can do with the property — it might prevent you from subdividing, dictate what materials you must use on the exterior, or prohibit certain uses.

Zoning and planning certificates. The property's zone (residential, mixed use, etc.) and any planning overlays that affect it.

Building permits from the last seven years. All building permits issued under the Building Act 1993, including occupancy permits, must be disclosed.

Services. Confirmation that water, sewerage, drainage, gas, and electricity are connected to the property.

Rates and statutory charges. Council rates, water rates, and state land tax liabilities.

Owners Corporation certificate (for strata properties). Mandatory for any lot in a strata subdivision with an Owners Corporation. Must disclose current levies, sinking fund balance, known litigation, and insurance details.

The Red Flags That Matter Most

1. Easements over building areas. Easements themselves are not automatically disqualifying — every property has some. What matters is where they are located. An easement that runs across the back fence line is irrelevant to most buyers. An easement that runs through the middle of the property, or across a potential extension site, is a serious restriction. Cross-reference the easement location on the Plan of Subdivision with your plans for the property before bidding.

2. Building permits without corresponding occupancy or compliance certificates. A building permit authorises work to begin. An occupancy permit (or completion certificate) confirms the work was completed to the required standard. If the Section 32 lists a building permit for a new room, a deck, or a bathroom renovation, but there is no corresponding occupancy permit, the work is likely unfinished in regulatory terms — or was completed without final sign-off.

If this situation arises at settlement, the council can issue a notice requiring the new owner to either retrospectively certify the works (which may require rebuilding to current standards) or demolish them. This is your liability, not the vendor's, once you settle.

3. Missing building permits entirely. If you can see an obvious structural addition — a room, a carport, an extended living area — and the Section 32 contains no corresponding building permit, the works were probably done without council approval. Ask directly, have your conveyancer raise it, and consider whether you want to accept the liability.

4. Bushfire Management Overlay or Flood Overlay. Planning overlays appear in the council certificate and zoning documents within the Section 32. A Bushfire Management Overlay (BMO) on a peri-urban or regional property significantly restricts building work and typically inflates insurance premiums substantially. A flood overlay affects insurability and potentially restricts development. These overlays are legally imposed on the land and follow the property, not the current owner.

5. Owners Corporation red flags for apartments and townhouses. The OC Certificate must be current and complete. Specifically look for:

• A sinking fund balance that is close to zero in an aging building (a special levy is coming)
• Pending or active legal proceedings (the OC is suing the original builder, or a lot owner is in dispute)
• Recent AGM minutes mentioning cladding audits, building notices, or essential services compliance failures
• A recent dramatic increase in insurance premiums (often a sign of a known structural risk)

6. Outstanding council or SRO orders. If the council has issued any compliance orders, notices, or infrastructure proposals (such as a road widening that will consume part of the front setback), these must be disclosed. These transfer to the new owner at settlement.

7. Heritage overlay. A heritage overlay restricts what you can change about the external appearance of the property. Before bidding on a period home with heritage designation, confirm with the local council what alterations would require a heritage permit and what is simply prohibited.

What Happens If the Section 32 Is Incomplete

If the Section 32 is materially inaccurate, misleading, or incomplete, the purchaser generally holds the right to rescind the contract prior to settlement without penalty under the Sale of Land Act. This protection is not automatic — you must identify the deficiency and act before settlement. By the time you are three months into planning a renovation blocked by a heritage overlay, the legal window may have closed.

The Triage Approach

For buyers who are bidding at multiple Melbourne auctions and cannot afford to commission a full conveyancer review of every property's Section 32, a triage approach is useful:

High-risk signals that require a full conveyancer review before bidding:

• Any mention of an Owners Corporation (strata property) — too complex to assess without a professional
• Any building permits within the last seven years without corresponding certificates
• Any planning overlays you are not familiar with
• Properties built before 1990 (asbestos risk, probable permit history)

Lower-risk signals where you can do preliminary screening yourself:

• Simple title with no encumbrances listed beyond standard utility easements
• Modern build (post-2000) with all permits in order
• No OC involvement
• No heritage designation

Even with preliminary screening, have your conveyancer do the final review before you bid. The cost of that review — $275–$440 — is far less than the cost of inheriting an undisclosed compliance liability.

The Victoria First Home Buyer Guide includes a Section 32 review checklist with plain-language explanations of every key section, so you can do your own preliminary triage before committing to professional review costs. Get the complete guide at firsthomestartguide.com/au/victoria/first-home/.

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