Published: 23 December 2014
Author: Ryan Carlisle Thomas
New changes to section 32 statements now require checklists
Buying and selling houses and land now requires a due diligence checklist to accompany the usual section 32 vendor’s statement, under changes which came into force on 1 October 2014.
According to Consumer Affairs Victoria (CAV), the provision of the checklist is intended to help buyers identify whether there exist any restrictions or obligations that may apply to the property, and may therefore influence their decision to purchase it.
A checklist must answer questions such as:
- Is the property subject to an owners’ corporation that may restrict such things as pet ownership?
- If located in a growth area, is there a requirement to pay an infrastructure contribution?
- Is the property exposed to flood and fire risk?
- Are there restrictions on removing native vegetation?
- Is the land subject to exploration licences?
- Are any recent building or renovations covered by insurance?
According to CAV, the checklist is a starting point only, and the agency urges buyers to seek professional advice in clarifying or answering any questions raised.
Whose responsibility is it to provide a checklist?
From now on, if you decide to sell the property without a real estate agent, you will need to provide a copy of the new checklist to any prospective purchasers. This means having copies of the checklist available at all open for inspections. When a property is advertised online, there must be a link to the checklist in the listing. The onus of providing the checklist is on you, the vendor, and penalties apply for failure to do so.
However, if you are using a real estate agent, it is important to note that the new changes put the onus of providing the checklist on the selling agent. Failure by the selling agent to provide copies of the checklist may lead to penalties. Likewise, the same checklist must be made available at all open inspections and on the website listings.
You can find out further information about the new checklist requirements and advice on buying or selling property at Consumer Affairs Victoria, here: consumer.vic.gov.au/duediligencechecklist. The due diligence checklist is free.