Early Section 32 Preparation More Important Than Ever

Currently vendors must provide a purchaser with the section 32 statement before the parties enter the contract. Under the Bill, a vendor would be required to make the section 32 statement available to prospective purchasers, on request, at least 14 days before an advertised auction or fixed date sale. In all other cases, it must be made available 14 days before the contract is entered into.

Failure to comply with these timing requirements may entitle a purchaser to rescind the contract at any time prior to settlement and expose the vendor to penalties. Importantly, non‑compliance cannot be remedied after the contract has been entered into. The proposed changes would not, for example, create a new 14‑day cooling‑off period commencing when the section 32 statement is eventually made available.

The stated intention of the proposed Bill is to improve prospective purchaser access to property information. In practice, the proposed changes represent a shift in how property transactions are commonly conducted. Property transactions often move quickly, with parties eager to finalise and execute the contract as soon as the paperwork is available. The proposed changes would have the effect of delaying transactions, notwithstanding both parties may otherwise be ready to proceed. They would also require vendors to be well prepared, recognising that preparing a section 32 statement that adequately addresses disclosure requirements can take time – particularly where property certificates are obtained from authorities and other third parties.

Early Release of Deposits to Require Express Agreement Under Proposed Changes

The Bill also proposes to repeal section 27 of the Sale of Land Act 1962 (Vic), removing the current statutory mechanism for a vendor to seek a release of deposit before settlement of the contract occurs. Section 27 is a Victorian‑specific statutory mechanism often criticised for creating uncertainty as to when it operates, largely due to the ambiguous requirement that it not operate where a contract includes a condition “enuring for the benefit of the purchaser”.

The Bill also provides that real estate agents will no longer be entitled to take their commission from deposit monies released prior to settlement or rescission, which would remove the pressure sometimes exerted by agents to secure an early release of the deposit.

While parties would still be able to agree to an early release of the deposit, such agreement would need to be expressly provided for in the contract. This proposed change would bring Victoria into alignment with other states and territories, where deposits are generally retained in trust until settlement or contract termination, unless otherwise agreed.

These reforms would place greater onus on parties to carefully negotiate contractual terms and manage risk where early release of the deposit is intended. This is particularly relevant for vendors who may rely on early access to deposit funds to meet other financial commitments.

We are monitoring the progress of this Bill. If you have any questions, please reach out to Bethany Visser, Senior Associate, or any member of the Madgwicks Property and Finance Team.