‘It’s The Law’ – Approach with caution

Buying a home in the Wimmera has become more difficult in the past 18 months or so as house prices have increased and new properties are often purchased quickly.

Buying a new home is often a stressful time and it is easy to get caught up in the qualities of the property – such as a great view or a brand-new kitchen – and failing to carefully consider the risks of the purchase.

However, given the amount of money involved with property purchases, it is crucial that you approach the purchase cautiously.

When purchasing a property, the agent will normally provide you with a vendor statement, also known as a section-32 statement. 

In Victoria, Section 32 of the Sale of Land Act 1962 makes it a legal requirement for certain information relating to the property that is for sale, be disclosed by the seller to the buyer. 

This information is often difficult to understand without a lawyer to decipher what it means for you. 

A vendor statement can disclose important things such as easements – which gives others rights in relation to the property; restrictions on the use of the property – such as second-hand materials other than bricks cannot be used on dwellings on the property; services connected to the property – such as sewage, gas and electricity; details of any owners corporation; council and water rates owing on the property and other important details.

You should have your lawyer review the vendor statement and contract for you before signing the contract to highlight risks that you might have not been aware.

A lawyer will usually also provide advice in relation to conditions you might wish to include in the contract – such as making the purchase subject to finance approval and satisfactory building and pest reports.

If the seller does not comply with their requirements to provide a valid vendor statement a purchaser might be able to terminate the contract at any time up until settlement and severe financial penalties might also be imposed.

In certain circumstances a purchaser might be able to sue a seller or their agent following settlement.

However, litigation is a much more costly and stressful process than simply walking away from the purchase when problems are revealed prior to entering into the contract.

Therefore, I recommend you seek the advice of a lawyer prior to signing the contract.

• Patrick Smith is the principal of O’Brien and Smith Lawyers. This article is intended to be used as a guide only. It is not, and is not intended to be, advice on any specific matter. Neither Patrick nor O’Brien and Smith Lawyers accept responsibility for any acts or omissions resulting from reliance upon the content of this article. Before acting on the basis of any material in this article, we recommend that you consult your lawyer.