Buying Land and the Section 32

by | Jul 26, 2020 | Practical Articles | 0 comments

Section 32 straw bale building

When buying land, the biggest hurdle initially is to find a block that meets all your requirements. Once you have settled on a location that meets your needs the estate agent has to supply you with a document known as a section 32. This must be supplied before any purchasing agreement can be signed.

 The idea of the section 32 is to give you vital information on the property, which could potentially prove detrimental to you as a buyer. It will detail any controlling encumbrances on the property, such as restrictions to building sizes or style. It will also show any easements that cannot be built over. In addition, it will declare the annual cost of council rates and any relevant water or sewerage rates for the property. Most people expect that they will only pay water rates and sewerage rates once they have connected to the service. However, in some councils you have to pay a reduced amount even for vacant land.

 

The section 32 will also declare any orders on the property.

This may be something like an order to contribute to the cost of a future road upgrade. Or the installation of sewerage to the property. Again, these are unavoidable costs regardless of whether you build or not. Indeed, they can make a significant difference to the cost of land. It is unlikely that you would immediately get your money back for the improvement if you had to sell the property quickly. If you find a cheap block that seems too good to be true, this might be one of the reasons.

 Section 32 straw bale building

 The section 32 will also detail what services are available to the property. You will probably need to connect services such as sewerage, water, electricity or gas, on vacant land such as this. The section 32 for our Inglewood property simply states “not connect”, in regards to Electricity, Gas, Water, Sewerage & Telephone. On another section 32 for a different block in Inglewood, the section 32 said “available” for all of these services. It would be really easy to assume that all of the available services were basically at the gate, however this was not the case. The sewerage and water were in the next street and there would be incredible cost to get them connected. The power cost $10,000 to extend the line to the gate.

 

In summation the section 32 is an incredibly important document. It should absolutely factor into your decision when it comes to purchasing a property. Be sure to go over it with a fine-toothed comb and contact all of the local authorities related to the property. Do this BEFORE you sign on the dotted line.

In some instances, it may take time to get a firm quote for a connection. In these cases most vendors will accept a contract conditional upon an acceptable quote being received. If the vendor fights you on this it is likely that they know that it will not lead to an acceptable quote. My advice would be to leave it alone if are you in any doubt.