Offer without section 32

Discussion in 'The Buying & Selling Process' started by Burramys, 31st Aug, 2018.

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  1. Burramys

    Burramys Well-Known Member

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    last Saturday, 25 August, I attended an OFI and asked for the s. 32. The REA said that this was not available and that it would be sent to me as soon as possible. Nothing so far. I made a written offer, and advised that when I saw the s. 32 the offer may be varied.

    How common is it for properties to be on the market with no s. 32? Also, is the REA obliged to advise the vendor of my offer? Thanks.
     
  2. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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  3. Burramys

    Burramys Well-Known Member

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    Terry, thanks.

    Section 32L of the Sale of Land Act is not quite the situation last Saturday. I made a written offer and had not seen the s. 32. The offer cannot proceed much further without the s. 32. I'm unsure if it is common to have properties on the market without a s. 32.

    The key words seem to me to be "that is required to be given under this Division". Hence, it may be that a property can be on the market but a contract cannot be signed and the property cannot be sold without a s. 32. I'm not a purchaser, just a possible purchaser, so s. 32L may not apply.

    As far as I can see there has been no breach, although it would be wise to have the s. 32 prepared before the property is put on the market. If nothing else the REA needs to know that the purported vendor owns it.

    Are you saying that a s. 32 has to be prepared before a property goes on the market? Also, even though there is no s. 32, does the REA have an obligation to send my offer to the vendor?
     
  4. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Without looking I believe the s32 is needed before marketing .
     
  5. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

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    I can't speak to this as a legal question, but I can give plenty of examples where properties were marketed well before a section 32 was generated.

    I purchased a property myself recently where it had been advertised online for some time. I had to wait 3 weeks after making my offer for the S32 to be available.
     
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  6. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    I think you are right Peter. it looks like it only has to be provide, completely, before the offer is accepted, otherwise the purchaser may rescind.
     
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  7. The Y-man

    The Y-man Moderator Staff Member

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    Unfortunately due to delays, our solis couldn't get our s32 ready in time for the last IP we sold, so we had 2 weeks on the market without it.

    The Y-man
     
  8. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

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    In my aforementioned purchase, a written offer was made and countersigned, but not on the standard REIV contract. When the S32 became available a full contract was generated and exchanged.

    My understanding is that the offer is essentially, "Subject to provision and review of the Section 32".

    When I did receive the S32, there was a problem with the existing insurance on the building. I did discuss with my solicitor the option of exiting the deal at that point. Instead we opted to add conditions to the contract to ensure appropriate repairs were made and adequate insurance was obtained prior to settlement.

    My point is that you can make and offer and have it accepted without an S32, but until that's available, it's still a conditional contract.
     
    Last edited: 31st Aug, 2018
  9. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    It might be a valid contract, but one in which the purchaser can rescind.
     
  10. JacM

    JacM VIC Buyer's Agent - Melbourne, Geelong, Ballarat Business Member

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    More often than not, a property is on the market before the s32 is available. The reason is because a selling agent cannot control how long a solicitor/conveyancer will take to produce it, but wants to secure the listing.

    Normally a selling agent has a 90 day exclusive authority in which to sell a property before a vendor can up sticks and go to another agent. So understandably, a selling agent will not want to waste any time. They can and will go to market without the s32 if needs be to start drumming up interest.
     
    Last edited: 31st Aug, 2018
  11. Burramys

    Burramys Well-Known Member

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    Thank you, that's most illuminating. It still seems a little risky for an REA to start a sale campaign without clear evidence that the client owns the property. No matter, not my job. Is the selling agent obliged to pass on offers to the vendor even though a s. 32 has not been prepared?
     
  12. The Y-man

    The Y-man Moderator Staff Member

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    Don't know if they are obliged to, but we always got an update after opens, as well as a weekly record of people who went through and their thoughts.

    The Y-man
     
  13. Rover

    Rover New Member

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    I doubt an REA would begin a campaign without evidence of property ownership. No one need wait on a section 32 to be prepared by a solicitor or conveyancer to obtain this information. You can find out registered proprietors’ names and addresses, mortgage details, and information about other encumbrances affecting land, via a land title search. Information is provided by Landata; financial institutions (and I imagine agents too) have subscriptions to information broker databases (an example: Equifax), who provide this. As a purchaser you can access the information too (at a fee). Or you can wait for it to be provided (at no cost), as part of the many documents supplied in a section 32 ;-)
     
  14. PurpleTurtle

    PurpleTurtle Well-Known Member

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    In my (admittedly limited) experience, if you visit a property earlier in the campaign it is very common for there to be no S32 yet.