The section 32: seven things to check before you sign, and the one that lets you walk away

The section 32 is forty to a hundred pages long, most of it certificates, and most buyers skim the first page and sign.

I understand why. It looks like paperwork. But it is the only document in a Victorian property transaction that, if it is wrong, lets you walk away up to the day of settlement. Which means it is also the document the vendor’s side is most careful about, and the one where a careless vendor is most exposed.

Here is what it is, what to read first, and how the exit works.

What the vendor must disclose

Sections 32A to 32I of the Sale of Land Act 1962 set out what a vendor must give a purchaser before the purchaser signs. In practice the statement covers:

1. Financial matters. Rates, taxes, charges and outgoings affecting the land, including land tax if the vendor is liable, and any amounts owed to an owners corporation.
2. Insurance. Whether the land is insured against damage while the purchaser's risk has not yet passed, and, where an owner-builder has done work in the last six years, the warranty insurance and a defects report.
3. Land use. Easements, covenants and other similar restrictions on title, whether registered or not; whether there is access by road; the planning zone and overlays; and whether the land is in a designated bushfire-prone area.
4. Notices. Any notice, order, declaration, report or recommendation of a public authority or government department affecting the land that the vendor knows about, including compulsory acquisition, and any notice of a proposed heritage or environmental listing.
5. Building permits. Particulars of any building permit issued in the last seven years.
6. Owners corporation. If the land is affected by one, the owners corporation certificate and the documents that go with it: rules, insurance, minutes, financial position, and any current or proposed special levies.
7. Growth areas infrastructure contribution. Whether GAIC applies.
8. Services. Which of electricity, gas, water, sewerage and telephone are connected.
9. Title. A copy of the register search and the plan or diagram of the land.

That is the statutory list. The certificates behind each item (council, water authority, State Revenue Office, VicRoads, planning) are what make the document thick.

The seven pages that actually change deals

Nine items are required. In my experience, seven pages decide whether a buyer should proceed, renegotiate or walk.

1. The register search: what is on title. Look for anything other than the vendor and their mortgage. A caveat means someone else claims an interest. A second mortgage means the vendor needs both lenders to settle. A “section 173 agreement” with council is a standing restriction on use, and it runs with the land to you.

2. Easements. A sewer easement down the side of the block is normal. A drainage easement through the middle of the backyard is a building constraint for life. The plan will show it; the section 32 should list it; the question is whether it affects what you intend to build.

3. Restrictive covenants. “No more than one dwelling” on a block you bought to subdivide is a very expensive sentence. Single-dwelling covenants, materials covenants and building-line covenants from old subdivisions are still enforceable. Removing one is a Supreme Court or planning process that takes months and is not guaranteed.

4. Planning overlays. Heritage, flood, bushfire management, vegetation protection and design and development overlays all limit what you can do without a permit. Overlays do not stop you buying; they change what you have bought.

5. Notices and orders. A council building notice, a fire services order, a road widening proposal, a contaminated land notice. This section is short and the entries in it are the most important sentences in the document.

6. Building permits in the last seven years. If there is a new deck, a pergola, a bathroom relocation or a garage conversion and no permit for it, you are buying work that may not comply, and the council can require it to be fixed or removed after you own it. If an owner-builder did the work, the Act requires the warranty insurance and a defects report; missing either is a red flag and a possible rescission ground.

7. The owners corporation certificate. For an apartment or townhouse this is where the money is. Read the current levies, the sinking fund balance, the insurance certificate, the last AGM minutes and, above all, any proposed special levy. A building with cladding, water ingress or a lift replacement coming has it in the minutes. The certificate is dated; if it is more than a few months old, ask for a fresh one.

The exit: section 32K

This is the clause buyers do not know exists and vendors wish did not.

Under section 32K, if the vendor did not give the section 32 before the purchaser signed, or if the statement contains information that is false or incomplete in a material respect, the purchaser may rescind the contract at any time before settlement by written notice.

The vendor’s only defence is to satisfy a court that they acted honestly and reasonably and ought fairly to be excused, and that the purchaser is substantially in as good a position as if the statement had been correct. Both limbs. That is a narrow door.

Three practical points:

• The right exists right up to settlement. Not for three days. Not for 14 days. Until the money changes hands. A buyer whose finance has fallen over a week before settlement will have their lawyer read the section 32 very closely, and so will a buyer who has found something better.
• “Incomplete” is as good as “false”. A section 32 that leaves out an easement, a building notice or a known proposed levy is incomplete. The vendor does not have to have lied.
• The remedy is rescission, not damages. You get your deposit back and the contract is over. If you want the property with a price adjustment, that is a negotiation, and the threat of rescission is the leverage.

What is changing

From a date to be proclaimed, and by 1 June 2027 at the latest, the Consumer Legislation Amendment Act 2026 requires the section 32 to be available at least 14 days before an auction or fixed-date sale, and 14 days before signing for other sales. The vendor must also tell the purchaser in writing of any change before signing. That is a significant improvement for buyers, who today can receive a 90-page statement two days before an auction. Until commencement, the fix is simple: send the section 32 to your lawyer the day it arrives.

The 20-minute version

If you only have twenty minutes before an auction and a section 32 in front of you, read, in this order: the notices and orders section; the register search; the plan, for easements; the planning certificate, for overlays; the building permits; the owners corporation certificate and minutes; the outgoings. Then call us. Twenty minutes is enough to know whether there is a problem. It is not enough to know whether you should live with it.