The real estate market may seem somewhat confusing for someone who is not familiar with it at all. Sellers need to do a fair share of preparation to be able to sell their property while buyers need to do a lot of research before they purchase any kind of property.
One of the most important parts of this buying and selling process is the vendor’s statement which sellers provide to potential buyers. Without further ado, here’s what a vendor’s statement is and what it is used for.
What Is a Vendor’s Statement?
A vendor’s statement is also known as section 32. This statement is a document that is meant to inform potential buyers about the key aspects and details of a particular property they are interested in. Vendor’s statements are given to buyers before they decide to buy the property so that the buyer carefully considers all things and only then makes the purchase.
If you are a buyer who is still looking for a property that will be ideal for you, then you shouldn’t worry about the vendor’s statements just yet. Focus your attention on your research. You can use the Soho property match tool to find the right property for your needs, priorities, and abilities. Then, once you start communicating with the respective sellers, make sure to pay attention to their respective vendor’s statements.
A vendor’s statement is particularly critical before the buyer signs the contract to purchase a particular property. In a document like this, the seller can explain things that aren’t obvious just by inspecting the property. The buyer can be aware of quite a few details about the property they want to purchase, but it’s the vendor’s statement that fully informs them.
Buyers are usually advised to have a legal practitioner or conveyancer who can check the vendor’s statement. The buyer themselves might not have enough knowledge about the real estate market to understand what information in the statement is particularly important and what doesn’t play that big of a role.
In essence, vendor’s statements are a critical part of the buying and selling process. It helps potential buyers and sellers communicate better and come to a mutual agreement. Moreover, it allows sellers to be honest with the buyers to ensure that they aren’t breaking the law by trying to trick the buyer into purchasing the property without being aware of all the information related to the said property.
What Does a Vendor’s Statement Cover?
So, what exactly does a vendor’s statement cover? What does it include? Usually, a vendor’s statement covers:
- Mortgages – These are the written contracts that give lenders of finance specific rights over the property.
- Covenants – These are different agreements that require the owner of the property to do (or refrain from doing) specific things. For instance, it could state that there can be no more than a single dwelling built on the land. There can also be limits or restrictions on future developments or renovations.
- Easements – This is the right held by one individual to use another individual’s land for something. For example, this could include using the land for drainage and sewerage pipes.
- Zoning – This explains how the council will allow the land to be used. For instance, there can be restrictions on owning pets or future developments.
- Outgoings – These are different types of costs that the owner of the property incurs such as rates or insurance.
- Building Conditions – This includes whether the property is in good condition and whether it complies with all the relevant building regulations. Whether the property is accurate to the measuring on the title should also be noted.
- Dangers – This includes a declaration in case the property is located in a bushfire-prone area or an area with other kinds of dangers such as floods or natural disasters.
A vendor’s statement should also include any relevant details related to legal claims and titles, adverse interests such as mortgages and caveats, land tax, and building permits. The vendor’s statement should be provided to potential buyers before any kind of contract is signed. In other words, the seller shouldn’t sell the property before the buyer has read the vendor’s statement.
Keep in mind that the vendor’s statement is a legal document, so it has to be factually accurate as well as free of any linguistic errors. The statement should be complete to the best knowledge of all parties. It’s best to have a conveyancer who will be responsible for the vendor’s statement and will help both parties (seller and buyer) communicate effectively.
If you are a seller and want to write a draft of a vendor’s statement already but you don’t have enough experience, you can hire an experienced writer from the writing service Trust My Paper. You can get in touch with a conveyancer or your legal representative to polish the document and work together to create its final version.
In case a vendor’s statement is written incorrectly, then the buyer has the right to terminate the contract of sale. They can also terminate the contract if the statement is incomplete or inaccurate (i.e. it doesn’t have all the relevant information or the information is false). This is precisely why sellers should treat vendor’s statements seriously. It isn’t difficult to right the vendor’s statement correctly, but it does require proper attention and care.
What Isn’t Included in a Vendor’s Statement?
While some things are absolutely necessary for a vendor’s statement, there are certain pieces of information that aren’t generally covered in such documents. So, what isn’t included in a typical vendor’s statement? It’s not that these details shouldn’t be covered but rather that they are optional:
- Building Conditions – As noted above, you can include an explanation of the current state of the property, but it isn’t actually required.
- Compliance – Whether the property complies with building regulations is critical information, but it isn’t always included in the vendor’s statement.
- Measurements – You can include a statement on whether the measurements are accurate, but you could also provide this information in a separate document.
The seller is legally responsible for the vendor’s statement, so if you are selling a property, it is your own responsibility to take care of everything and provide a vendor’s statement to potential buyers. You might even need to organise an inspection of the property by a qualified professional to help you write a better vendor’s statement.
Wrapping Up
To sum up, if you are a seller, you will need to create a vendor’s statement for potential buyers. And if you are a buyer, you will need to carefully read the vendor’s statement (and have your legal practitioner or conveyancer read it) before you sign any documents and buy a property.
