HELD LAWYERS

Est.1991

Property & Commercial Law

Law Matters

July 2014 Newsletter

Welcome
In this months bulletin, we examine: changes to Vendors Section 32 Statements; PPSA and
real estate; and restrictive covenants.
If there are topics you would like us to look into, please let us know.
Each bulletin touches on a broad range of topics in an easy to read, practical way. We aim to
give you a brief, but better understanding of current issues as they arise, and food for thought!
We are happy to visit you in 2014 and provide staff or client briefings about a range of topics
or matters of interest to you. Please feel free to contact us in that regard.
We hope to see you (again) soon in person.
Adam Held
Principal

Vendors Section 32 Statements new

disclosure requirements 1 October 2014
The Vendors Section 32 Statement outlines the
information a property seller must provide prospective
buyers, such as the name of the relevant planning
scheme and details of any undischarged mortgages
or charges applying to the land. This information is
provided in a Vendors Section 32 Statement.
Changes to section 32 of the Sale of Land Act 1962,
scheduled to come into effect on 1 October 2014,
will clarify the information that sellers must provide to
prospective home buyers. The changes are outlined in
the Sale of Land Amendment Act 2014.
The Sale of Land Amendment Act repeals section 32
and re-enacts the majority of its disclosure requirements.
The re-enacted disclosure requirements are grouped
under key themes and clarify the operation of certain
requirements. Key changes to Vendors Section 32
Statement include:
many of the current warnings will no longer be required

tightening requirements to ensure only government

notices and approved proposals that currently and
directly affect the land for sale are disclosed
updating requirements for disclosing livestock disease
and agricultural contamination notices
providing greater flexibility to vendor of land affected
by owners corporations, including that inactive owners
corporations will not be required to provide a certificate
limiting disclosure of essential services to only those
services that are not connected to the land for sale
codifying common practice by replacing requirements
for a copy of the Certificate of Title with a copy of
the Register Search Statement and the document
referenced in that Statement that shows the location
of the land for sale.
Under the changes, Vendors Section 32 Statements
will have to be simpler and easier to prepare. Sellers
will no longer have to include a second copy of the
Vendors Section 32 Statement in the contract of sale.

clarifying planning information to be disclosed,

including specifying planning overlays affecting the
land

Under the new requirements, sellers will have to make

a due diligence checklist available to prospective

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buyers. The purpose of the due diligence checklist is

to provide purchasers with a tool to make their own
enquiries into issues of interest to them when they first
start looking at properties. If a seller engages an estate
agent to act on their behalf, the obligation to make the
due diligence checklist available falls to the estate agent.
The details of the due diligence checklist are currently
being finalised. This checklist will also be available online
before 1 October.

restrictions that can be included in a restrictive covenant.

Councils are not responsible for preparing and writing
restrictive covenants. They are a private treaty.
There are three main types of restrictive covenants:
1.

Building covenants imposed by developers to

ensure that the owners of lots complete building
works within a certain timeframe and in accordance
with specific building requirements (for example, in
relation to building height, colours and setbacks).

2.

Covenants designed to protect the neighbourhood

character or guide the long term development of an
area.

3.

Covenants that impose rules of communal living on

lot owners.

(source: Consumer Affairs Victoria website)

Personal Property Securities Act 2009 (PPSA)

application to real estate?
The sale of land usually does not also involve the sale of
personal property improvements are treated as fixtures
and therefore part of the land so generally, the PPSA
has no application to such a sale.
This is obvious in the case of vacant land. Standard sale
contracts provide for the sale of goods with the land. In
the case of residential sales, these goods are usually of
little or no value, and would be excluded from application
of the PPSA where the items are worth less than $5,000.
However, in the case of commercial or industrial property,
there may be goods of significant value. Parties should
be aware of the PPSA release procedure of General
Condition 7.

Restrictive Covenants removal & variation

A restrictive covenant is a private written agreement
between landowners to restrict the use or development
of land for the benefit of other land. The land where the
restrictions apply is called the burdened land. The land
that benefits from the restrictions on the burdened land
is called the benefited land.
Restrictive covenants are most commonly applied when
a developer sub-divides land for sale and wishes to apply
some restrictions on the use and development of the lots
to benefit or protect other land.
A covenant that limits the use and development of a lot to
a single house is a common type of restrictive covenant.
Covenants that restrict the type of building materials
that can be used for new buildings and fences are also
common.
A registered restrictive covenant is a restrictive covenant
that is recorded on the certificate of title for the burdened
land. Restrictive covenants are commonly created to
impose restrictions that are customised to the needs of
an area or development.
There are no legislative rules about the kinds of

There are three main ways to remove or vary a covenant:

1.

Applying to the Supreme Court for an order under

section 84 of the Property Law Act 1958.

2.

Amending the planning scheme under Part 3 of the

Planning and Environment Act 1987.

3.

Applying for a planning permit under Part 4 of the

Planning and Environment Act 1987. Recent case
law provides that objectors to the permit application
are not limited to persons benefiting from the
covenant, but also persons with a planning interest,
being confined to those persons with ordinary
planning merit-type objections.

(source: Consumer Affairs Victoria website)

Referrals
Should you require non-legal assistance with various
matters, we are happy to provide you with contact details
for a range of service providers, including financial
institutions, accountants, real estate agents, brokers, etc.

Areas of practice
Property Law including conveyancing and leasing
Commercial and Business Law
Banking and Finance Law including mortgages
and guarantees
Wills and Estates Law
Intellectual and Industrial Property Law
Litigation
If you would like further details or assistance or to
discuss information contained in this publication or
generally, please do not hesitate to contact us. For
copies of this and other publications, visit our website at
www.heldlawyers.com.

Disclaimer
This publication is intended to provide commentary and general information only. It should not be relied upon as legal advice. It is not intended to be a complete
or definitive statement of the law on the subject matter covered. Further professional advice should be sought before any action is taken in relation to the matters
described in this publication. Persons listed may not be admitted in all jurisdictions.
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