A Section 32 Vendor's Statement can run to 100 pages or more. Buried in those pages might be issues that could cost you thousands of dollars — or give you grounds to walk away from the deal entirely.
Here are the five red flags we see most often, what they mean, and what you should do if you spot them.
1. Missing or outdated Owner's Corporation certificate
If you're buying an apartment, unit, or townhouse that is part of an Owner's Corporation (OC), the vendor must include a current OC certificate in the Section 32. This certificate is your window into the financial health of the building.
Why it matters
The OC certificate reveals the current levies you'll be required to pay, how much money is in the maintenance and sinking funds, the building's insurance details, and — most importantly — whether any special levies have been proposed or passed.
A missing OC certificate is a serious deficiency. Under section 32 of the Sale of Land Act, the vendor is required to attach this document. If it's not there, you may have rescission rights under Section 27.
What to do
If the OC certificate is missing, ask the agent for it immediately. If it's there but more than a few months old, request an updated version. Pay close attention to the meeting minutes attached to the certificate — they often contain the most revealing information.
2. Undisclosed easements or covenants
Easements and covenants are restrictions registered on the title that can significantly affect what you can do with the property. An easement might give a neighbour or utility company the right to access part of your land. A covenant might restrict what you can build.
Why it matters
An easement running through your backyard could prevent you from building an extension. A drainage easement might mean you cannot build a pool. A restrictive covenant might prevent you from subdividing or building above a certain height.
These restrictions are registered on the title, so they should be disclosed in the Section 32. However, we regularly see cases where the title search is included but the actual plan showing the location of easements is missing or illegible.
What to do
Carefully review the title search and the plan of subdivision. Make sure you understand where any easements run and what they are for. If you have plans to renovate, extend, or subdivide, have your solicitor confirm that the easements and covenants won't prevent your plans.
3. Planning overlays (heritage, bushfire, flood)
Planning overlays are applied by the local council or state government and impose additional requirements on what you can do with the property. The most common overlays that catch buyers off guard are heritage, bushfire, and flood overlays.
Why it matters
A Heritage Overlay can make renovations significantly more expensive and time-consuming. You may need heritage permits for even minor changes to the facade, and demolition may be restricted or prohibited entirely.
A Bushfire Management Overlay (BMO) can affect your insurance premiums, require you to maintain a fire-safe perimeter, and impose additional building standards (BAL ratings) if you renovate or rebuild.
A Land Subject to Inundation Overlay (LSIO) or Special Building Overlay (SBO) means the property is in a flood-prone area. This can affect insurance, require flood-resistant construction for any new works, and in some cases prevent development altogether.
What to do
Check the planning certificate attached to the Section 32. If any of these overlays apply, research the specific implications for the property. Get quotes for insurance before you commit, and factor in the additional costs of any planned renovations. Our guide to hidden costs covers some of these additional expenses.
4. Upcoming special levies buried in OC minutes
This is the one that catches the most buyers. The OC certificate itself might look fine — reasonable levies, adequate funds in reserve. But hidden in the attached meeting minutes, you might find that the OC has discussed or voted on a special levy for major works.
Why it matters
Special levies can be substantial. A new roof, lift replacement, or structural remediation can easily run into tens of thousands of dollars per lot owner. If a special levy has been proposed or is under discussion, you could be liable for it shortly after settlement.
Vendors are required to disclose special levies that have been passed. But levies that are “under discussion” or “being investigated” occupy a grey area. The minutes are where you'll find the clues.
What to do
Read every page of the OC minutes. Look for any discussion of major works, building defects, cladding remediation, lift upgrades, waterproofing issues, or any item where quotes have been obtained. If the minutes mention a building report or engineer's report, ask the agent or OC manager for a copy.
5. Incomplete vendor disclosure under s32(d)
Section 32(d) of the Sale of Land Act requires the vendor to disclose certain matters they are aware of. This includes any notices or orders from councils or authorities, ongoing disputes, contamination, and anything else that could materially affect the value or use of the property.
Why it matters
A vendor who ticks “no” on every disclosure question might be honest — or might be cutting corners. If you later discover an issue that should have been disclosed, you may have grounds for rescission or a claim for damages, but enforcing those rights is stressful and expensive.
What to do
Cross-reference the vendor's disclosures with other information available to you. Check the council's website for any outstanding notices. Look at the property history on planning portals. If the property has had recent renovations, check that building permits were obtained and completed.
Tools like Pre Contract Review can help you quickly cross-check the Section 32 for common deficiencies and flag areas that need closer attention — before you spend money on a full legal review.
The bottom line
Most buyers flip through the Section 32 quickly, if they read it at all. The five issues above are the ones we see most frequently, and they are the ones most likely to cost you money after settlement.
Taking 30 minutes to review the key sections — or using an automated tool to flag potential issues — can save you thousands of dollars and a lot of stress. If you spot any of these red flags, it does not necessarily mean you should walk away. But it does mean you should get professional advice before signing.