When purchasing a property the vendor must give a certain statutory amount of information to the prospective purchaser. This is contained in a document called the Vendors Statement. It is sometimes called a section 32 as it is described in Section 32 of the Sale of Land Act.
We will not go through exactly what is contained in this document suffice to say: This is the document that you need to get legal advice on. It will sometimes come with a Contract of Sale written by the vendors’ solicitor or a simple REIV or Law Institute Contract. This also needs to be checked by your solicitor before you sign it. If there is no gazetted auction within three days or there hasn’t been one three days ago, you may have a three day cooling off period, in which you can end the agreement but with a penalty of 0.2% of the purchase price or $100, whichever is greater.
If you are going to bid at auction you must have had the documents checked prior to bidding. If you win you will be asked to sign the documents unconditionally at the conclusion of the auction.
So what do you do when the Real Estate Agent refuses to give you a copy prior to the auction!! This happens more often than you think. Many times we are demanding the Contract of Sale on Friday afternoon before the auction. By law the documents must be on display 30 minutes prior to the auction, but as most members of the public do not have a solicitor on call 24 hours a day and especially not on a Saturday or Sunday when most auctions are held, what are they supposed to do. The usual selling agent response; “It’s not my fault; the vendors’ solicitor hasn’t completed it yet!”
If this happens to you, you have every right to challenge the auctioneer at the auction. Ask the auctioneer during the auction if you can bid and sign conditionally once a solicitor approves the contract. He can only say NO! Ask if he will postpone the auction until you can get legal advice.
If the agent will not allow you have the documents checked and he did not allow you time to get the documents checked prior to the auction, you should make a formal complaint to Consumer Affairs Victoria about the agents conduct. He will have reasonable right of reply, and it may not be his fault. If you sign a contract that has not been checked by a solicitor you may be opening yourself up to tremendous risk.
Some agents may withhold the Contract of Sale, simply because they do not want offers prior to the auction. Some may withhold the Contract because they know it contains many difficult and very one side conditions that any reasonable solicitor will want removed before their purchasing client signs. Other times there are documents that are missing and this will create a lot of extra work for the selling agent if potential purchasers want to question the validity of the Vendors Statement.
It may just be easier for the selling agent to simply not give enough time for the purchaser to scrutinise the documents. After all, the selling agent is acting for the vendor, not the purchaser.
If you have a cooling off period you can sign the contract and then get the documents checked: If you wish to withdraw you will be paying a penalty. To avoid this, always have the Contract checked by a solicitor before you sign them.
Ian James
Director JPP Buyer Advocates