The Law Handbook 2024

Chapter 6.2: Buying or selling a house 555 Buyers seeking to avoid the contract of sale due to an error or omission in the vendor’s statement should seek legal advice about the strength of their claim and the associated costs and legal implications before starting legal proceedings against the vendor or attempting to rescind the contract. A well-drafted vendor’s statement contains all the information required by the SL Act (s 32), including: • the title and plan of subdivision; • warnings about planning controls; • easements, covenants and similar restrictions (including leases); • planning information, including proposed amendments to the planning scheme; • prohibitions in the planning scheme against building a dwelling house, if the land is outside the metropolitan area; • whether there is road access to the property; • rates, taxes and outgoings charged on the land, or a statement that the charges do not exceed a specified amount; • statutory charges on the land; • services connected to the property; • insurance details if the contract does not provide for the property to remain at the vendor’s risk until the settlement date; • building guarantees and permits obtained in the previous seven years; • any notice, order or approved proposal affecting the land that the vendor could be reasonably assumed to have known about; • owners corporation notices and liabilities; • contaminated land; • orders under the Land Acquisition and Compensation Act 1986 (Vic); • Growth Areas Infrastructure Contribution information; • whether the property is on the Heritage Register; and • energy efficiency information. If land is sold pursuant to a vendor terms contract, the vendor must provide additional information, including details of interest and repayment terms of the loan. Details must be provided of any mortgages that will not be paid out, and the vendor’s default on the loan(s) (if applicable). A copy of a current title search (also called a register search statement) must be attached to the vendor’s statement. If the property being sold is an off-the-plan property, the vendor should disclose the latest version of the proposed plan of subdivision in the vendor’s statement. It is common for the vendor’s statement to include other searches and certificates from the relevant rating and tax authorities to show the outgoings as at the date of the contract of sale. It is mandatory for the vendor or their agent to give the buyer the due diligence checklist issued by Consumer Affairs Victoria before the buyer signs the contract of sale and the vendor’s statement. This checklist is available at www.consumer.vic.gov.au/ housing/buying-and-selling-property/checklists/ due-diligence. Material facts In addition to the vendor’s disclosure regime set out in the SL Act, the Sale of Land Amendment Act 2019 (Vic), which took effect from 1 March 2020, provides that vendors and agents cannot knowingly conceal any material fact about a property from a buyer. This helps a buyer make a fully informed decision before buying a property, as some information about a property might only be known to an owner and may not be known to a buyer, even if they have personally inspected the property. Material facts can include: • whether a murder has occurred on the property; • whether any building work has taken place without a building permit or planning permit, or that is otherwise illegal; • the underlying cause of an obvious physical defect where the cause is not readily apparent on inspection (e.g. a large crack in a wall would be obvious to a buyer, but the underlying reason for the crack, such as defective stumping, may not be clear to a buyer); • whether the property has been used as a meth­ amphetamine laboratory; • whether the property has flammable cladding; or • whether there is any asbestos on the property. The vendor or agent must answer any questions from a buyer about material facts as fully and frankly as possible. A vendor or agent who fails to disclose a material fact can be liable for penalties; however, a buyer will not necessarily be able to exit a contract because of this failure. For more information, see the Material Fact Guidelines on the Consumer Affairs Victoria website at www.consumer.vic.gov.au/saleofland.