Reading a section 32 in five minutes.

What it is, and what it is not

Under section 32 of the Sale of Land Act 1962, a vendor must give a purchaser a signed statement — with specified matters and attached documents — before the purchaser signs the contract. That is the whole mechanism. It is a disclosure obligation running from the seller to the buyer.

Which means three things for you:

• It is not a contract. It does not commit anyone to anything; it discloses.
• It is not a due diligence report. Consumer Affairs Victoria publishes a due diligence checklist that a vendor must make available, but it is advisory, creates no warranty, and is not part of the statement.
• It is not a planning approval, a soil report or a feature survey. Nothing in it tells you what the block will cost to build on.

And you are not in the chain. The document was written for a transaction you are not party to. You are reading someone else’s paperwork to protect your own quote — which is exactly the right reason to read it, and exactly the reason to be careful about what you say.

The five-minute order

You will not read forty pages at the table. Read these five things, in this order.

1. The plan of subdivision. Attached as part of the evidence of title. This is the only page that shows where on the lot an easement runs, and it is the page a builder should look at before any other. Lot dimensions, frontage, and the drawn easement strips are all here.

2. The encumbrances, caveats and notices panel of the register search statement. Every registered interest burdening the land: mortgages, restrictive covenants, easements, section 173 agreements. This panel plus the plan is where the overwhelming majority of deal-killers live.

3. The land use section (s 32C). This is the easement and covenant disclosure, and it is broader than the title — it covers any easement, covenant or similar restriction whether registered or unregistered, plus any existing failure to comply with one. It also gives you the planning scheme, the responsible authority, and the zone and overlay.

4. Notices and orders (s 32D). Anything a public authority has served on the land.

5. Building permits in the last seven years (s 32E), and the insurance section (s 32B), which is where owner-builder work surfaces. On a knock-down rebuild this matters less; on an extension it matters a great deal.

Easements: where they are, and what you can put on them

An easement is a right over someone’s land for someone else’s benefit. On a suburban residential lot, drainage and sewerage are far and away the most common.

There are three places an easement can show up — the plan, the title, and the section 32 — and they should agree with each other. But there is a fourth category that appears in none of them clearly: implied easements. Under section 12(2) of the Subdivision Act 1988, a plan can imply easements for support, shelter, drainage, services and the like without drawing a strip anywhere. They are invisible to anyone skimming the plan.

Building over an easement needs consent, and possibly two of them:

• Regulation 130 of the Building Regulations 2018 requires the report and consent of the service authority the easement is vested in before a building permit issues for a building over it. Note regulation 130(2): it does not apply to implied easements under the Subdivision Act.
• Section 148 of the Water Act 1989 separately requires the water corporation’s consent to build or place soil within one metre of its sewer or water infrastructure, or within its easement.

What consent actually gets given varies by authority and council policy, but the pattern is consistent: eaves, paths, fences, retaining walls and earthworks are commonly agreed; permanent dwellings and garages are commonly refused — and consent is unlikely at all where there is a viable alternative location on the site.

”A two-metre drainage easement across the rear of a fifteen-metre-deep buildable area is not a paperwork problem. It is a different house.”

— The practical rule

Easements can be removed — through section 23 or section 36 of the Subdivision Act, with a planning permit under Clause 52.02 — but a service authority will resist while its asset is in the ground, and the timeline is months. On a live deal, re-siting is almost always the answer.

Covenants: the ones that end the conversation

A restrictive covenant is a private agreement between landowners that restricts what can be built. Governments do not create or enforce them; the neighbours who hold the benefit do.

Three facts make covenants the sharpest item in the document:

• They run with the land. Your customer inherits it whether or not anyone mentioned it.
• A planning permit cannot authorise a breach. Section 61(4) of the Planning and Environment Act requires a responsible authority to refuse a permit that would authorise something breaching a registered restrictive covenant.
• A beneficiary can obtain an injunction. In Fitt v Luxury Developments Pty Ltd [2000] VSC 258 the Supreme Court restrained construction that breached a covenant. A neighbour can stop a half-built house.

Removing or varying one is possible and slow. There is a planning permit route under section 60 of the Planning and Environment Act — and for covenants created before 25 June 1991 the test requires the authority to be satisfied that beneficiaries are unlikely to suffer any detriment of any kind, including perceived detriment, which in practice closes the door. There is a Supreme Court route under section 84 of the Property Law Act 1958, where costs generally follow the event. Neither is a same-week fix for a customer who has already signed.

Three instruments, three very different answers

Reps routinely treat these as one thing. They are not, and the difference decides whether you redesign or make a phone call.

That last row is the one worth memorising. Design guidelines are frequently the negotiable item and frequently the one reps treat as immovable — while the covenant, which genuinely is immovable, gets waved through because it was one line in a panel nobody opened. Many developers secure guidelines by also registering a restriction or a section 173 agreement, so check the mechanism rather than assuming.

The three lines that kill deals late

Ranked by how completely they invalidate a project-home design:

1. A single-dwelling covenant. Kills a dual occupancy or a second dwelling outright, whatever the zone allows. The zone is irrelevant; the covenant wins.
2. An easement through the buildable area. On a narrow lot, a rear or side drainage easement can delete the alfresco, the garage, or the footprint.
3. A section 173 agreement carrying design or siting obligations. Building envelopes, setbacks, materials — binding on your customer, who very likely has never read it.

All three are visible in the section 32 before anyone signs a build contract. All three are effectively immovable afterwards. That is the whole argument for reading it in the first appointment rather than the third week.

One more thing worth knowing

Cooling off on a residential land purchase runs for three clear business days from signing, and ending the contract costs the purchaser $100 or 0.2 per cent of the price, whichever is greater. There are exceptions — most importantly, there is no cooling-off right where the purchaser is a corporate body, which catches more investor house-and-land buyers than people expect.