23 November 2012
Section 32 Red Tape Review
Policy and Legislation Branch
Consumer Affairs Victoria
GPO Box 123
MELBOURNE VIC 3001
By email: cav.consultations@justice.vic.gov.au
Dear Sir
Re: Review of Section 32 Sale of Land Act 1962
This is an important review of an important section of an important Act.
The Sale of Land (Amendment) Act 1982 which introduced the concepts of
vendor’s statements and cooling off was probably the most important on-going
piece of legislation affecting estate agency practice in the past 40 years, with
the possible exception of the Residential Tenancies Act 1980 and the Sale of
Land Regulations 2004. Whilst highly controversial at the time, the 1982
amendments profoundly streamlined estate agency procedures and led to a
significant increase in knowledge and skill levels, not only of agents but also of
vendors and purchasers.
It would therefore be inconceivable to contemplate returning to a situation
where a buyer would purchase a property without seeing a copy of title,
without seeing a copy of a title plan, without knowing whether a covenant
restricted the use of the property or without knowing the zoning of the property.
These at least are minimum disclosure matters, controversial thirty years ago but
crucial, albeit mundane, today.
The 1982 amendments made it necessary for agents to invest in new
technology ie. a photocopier! The Act has not kept pace with technological
change over the following thirty years and it remains uncertain whether a
vendor’s statement is valid if it bears a photocopy of the vendor’s signature or
a scanned copy. The Act refers to “a copy signed by the vendor…” The
review should address this point and allow for a vendor’s statement to be
provided by or on behalf of a vendor, and not requiring an original pen and ink
signature.
-2-
The original intent of the 1982 amendments were to address matters primarily
relating to the title and structures. This has been expanded unnecessarily over
time to provide a quick fix political fix to some inconvenient political issues – eg.
the sale of old and unserviced rural Crown Allotments in rural Victoria to
unsuspecting - and uninspecting - buyers, or the clash of rural activities with
“tree-changers” lifestyles. Many of these disclosures are “motherhood
statement” by the Nanny State, are largely disregarded by buyers and could
be abandoned.
The requirements to disclose building approvals and owner builder insurances
have become more onerous over the years but should remain. It is a factual
statement of whether or not the vendor has complied with its various
obligations under the Building Act 1993 and others. It serves an important use.
Some reference is made in the discussion paper as to when the vendor’s
statement must be given, and specifically whether it should be available prior
to a property being offered for sale or prior to commencement of any –
including verbal – negotiations. These moves should be resisted . Firstly, such
moves increase red-tape, not reduce it. Secondly they restrict competition by
not allowing it to commence until a later time. Thirdly it ignores the reality that
many properties are in fact transacted off-market, without being formally
offered to the market or advertised.
The present situation requires a vendor’s statement to be provided prior to the
obtaining of a written offer and Victorian law requires any sale to be evidenced
in writing. There is no need to change this situation.
There is a need to review the working of Section 32 (2) (c) which requires the
disclosure of any zoning affecting the land but not at the same time requiring
the disclosure of any planning overlay which may adversely affect a use which
might otherwise be permissible under the zoning. Likewise it refers to land being
“reserved” whereas modern terminology and practice would have land being
subject to a Public Acquisition Overlay. The wording in the Act has not kept
pace with changes in planning schemes.
-3A proper vendor’s statement would quantify the amount of Council and water
rates. This level of disclosure is preferred to the alternative standard of quoting
a “Do Not Exceed” figure. That alternative still needs to be allowed in cases,
eg. off the plan, where the property being sold is not separately assessed and
rated.
One of the greatest causes of delay is in obtaining the Owners Corporation
Certificate, particularly in the case of a self-managed and barely functioning
owners corporation. The requirements for inclusion of an Owners Corporation
Certificate nevertheless should remain, if only as an encouragement for selfmanaged owners corporations to be aware of, and comply with, their
obligations.
No doubt there will be other more pressing issues that the Review will also
consider. In summary, Section 32 of the Sale of Land Act generally works well,
confers significant benefits to purchasers, vendors and agents and should
continue. Some updating and some trimming of excess “padding” is now due
and should be the focus of the review. It is also about time the Act became
gender neutral.
Yours faithfully
C E CARTER & SON PTY. LTD.
RICHARD CARTER
Managing Director
28 November 2012
Mr. Robert Larocca
Policy & Public Affairs Manager
The Real Estate Institute of Victoria Ltd
335 Camberwell Road
CAMBERWELL 3124
By email: rlarocca@reiv.com.au
Dear Robert
Re: Review of Section 32 Sale of Land Act 1962
This is an important review of an important section of an important Act.
The Sale of Land (Amendment) Act 1982 which introduced the concepts of
vendor’s statements and cooling off was probably the most important on-going
piece of legislation affecting estate agency practice in the past 40 years, with
the possible exception of the Residential Tenancies Act 1980 and the Sale of
Land Regulations 2004. Whilst highly controversial at the time, the 1982
amendments profoundly streamlined estate agency procedures and led to a
significant increase in knowledge and skill levels, not only of agents but also of
vendors and purchasers.
It would therefore be inconceivable to contemplate returning to a situation
where a buyer would purchase a property without seeing a copy of title,
without seeing a copy of a title plan, without knowing whether a covenant
restricted the use of the property or without knowing the zoning of the property.
These at least are minimum disclosure matters, controversial thirty years ago but
crucial, albeit mundane, today.
The 1982 amendments made it necessary for agents to invest in new
technology ie. a photocopier! The Act has not kept pace with technological
change over the following thirty years and it remains uncertain whether a
vendor’s statement is valid if it bears a photocopy of the vendor’s signature or
a scanned copy. The Act refers to “a copy signed by the vendor…” The
review should address this point and allow for a vendor’s statement to be
provided by or on behalf of a vendor, and not requiring an original pen and ink
signature.
-2-
The original intent of the 1982 amendments were to address matters primarily
relating to the title and structures. This has been expanded unnecessarily over
time to provide a quick fix political fix to some inconvenient political issues – eg.
the sale of old and unserviced rural Crown Allotments in rural Victoria to
unsuspecting - and uninspecting - buyers, or the clash of rural activities with
“tree-changers” lifestyles. Many of these disclosures are “motherhood
statement” by the Nanny State, are largely disregarded by buyers and could
be abandoned.
The requirements to disclose building approvals and owner builder insurances
have become more onerous over the years but should remain. It is a factual
statement of whether or not the vendor has complied with its various
obligations under the Building Act 1993 and others. It serves an important use.
Some reference is made in the discussion paper as to when the vendor’s
statement must be given, and specifically whether it should be available prior
to a property being offered for sale or prior to commencement of any –
including verbal – negotiations. These moves should be resisted . Firstly, such
moves increase red-tape, not reduce it. Secondly they restrict competition by
not allowing it to commence until a later time. Thirdly it ignores the reality that
many properties are in fact transacted off-market, without being formally
offered to the market or advertised.
The present situation requires a vendor’s statement to be provided prior to the
obtaining of a written offer and Victorian law requires any sale to be evidenced
in writing. There is no need to change this situation.
There is a need to review the working of Section 32 (2) (c) which requires the
disclosure of any zoning affecting the land but not at the same time requiring
the disclosure of any planning overlay which may adversely affect a use which
might otherwise be permissible under the zoning. Likewise it refers to land being
“reserved” whereas modern terminology and practice would have land being
subject to a Public Acquisition Overlay. The wording in the Act has not kept
pace with changes in planning schemes.
-3A proper vendor’s statement would quantify the amount of Council and water
rates. This level of disclosure is preferred to the alternative standard of quoting
a “Do Not Exceed” figure. That alternative still needs to be allowed in cases,
eg. off the plan, where the property being sold is not separately assessed and
rated.
One of the greatest causes of delay is in obtaining the Owners Corporation
Certificate, particularly in the case of a self-managed and barely functioning
owners corporation. The requirements for inclusion of an Owners Corporation
Certificate nevertheless should remain, if only as an encouragement for selfmanaged owners corporations to be aware of, and comply with, their
obligations.
No doubt there will be other more pressing issues that the Review will also
consider. In summary, Section 32 of the Sale of Land Act generally works well,
confers significant benefits to purchasers, vendors and agents and should
continue. Some updating and some trimming of excess “padding” is now due
and should be the focus of the review. It is also about time the Act became
gender neutral.
Yours faithfully
C E CARTER & SON PTY. LTD.
RICHARD CARTER
Managing Director