Section 32 statements should disclose leases

It has long been a vexed question whether a vendor of land needs to include details of a lease affecting the land in the vendor statement provided to a purchaser pursuant to s.32 of the Sale of Land Act 1962.  Section 32 requires the disclosure of, among other things,  mortgages and charges affecting the land but does not expressly require disclosure of a lease. The vendor is required to include in the statement  a “a description of any easement, covenant or other similar restriction affecting the land (whether registered or unregistered) and particulars of any existing failure to comply with the terms of that easement, covenant or restriction”. See: s.32(2)(b). It is established that s.32 should not be given a “narrow, restrictive construction having regard to the evident reformatory object of the leglislation”. See: for example, Vouzas v Bleake House Pty Ltd [2013] VSC 534 at [49].  In Krakowski v Eurolynx Properties Ltd (1992) V ConvR 54-436 ( BC9200732) O’Bryan J did not consider that s.32(2)(b) required a vendor to disclose the existence of a lease affecting the land. However, in IGA Distribution Pty Ltd v King [2002] VSC 440 at [252] Nettle J (as he then was) doubted that O’Bryan J was correct but did not specifically decide the issue. In Vouzas the vendor had disclosed the existence of the lease but had not disclosed that the tenant had entered into a conditional agreement to assign the lease. Macaulay J had to decide whether s.32(2)(b) required the vendor to disclose  that the tenant of the land being sold had entered into the conditional agreement to assign the lease.   The vendor knew about the conditional agreement to assign the lease. Macaulay J expressed the view that “the doubts expressed by Nettle J in the IGA case” concerning whether a lease need be disclosed were “well founded”. However,  his Honour held that the vendor had not breached s.32(2)(b)  because that section did not oblige a vendor to disclose a conditional agreement to assign a lease. His Honour also said that “he was not convinced that an assignment of lease would need to be disclosed under s.32(2)(b”).

Advertisements

, ,

  1. Leave a comment

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Owners Corporations Law

Developments in strata body corporate law in Victoria

The Warne Account

The blog of Dan Warne, Australian tech writer.

Best Practices for Legal Education

A Vision and a Road Map

Tisher Liner FC Law Blog

Legal Updates on Business Law, Property and Litigation

THE NSW BAR -- A COMMENTARY

AN ASSOCIATION OF UNCOMMON PEOPLE

With Compliments

Geoffrey Gibson

CommBar Matters

Commentary and case law from the Commercial Bar Association's finest.

The law of land and sea

Australian law of property and environment

Amicae Curiae

Women. Law. Legal Education. Legal Practice. Career. Work/Life balance

Carrie Rome-Sievers, Barrister

Developments in insolvency and commercial law

Equity, Trusts and More

Travis Mitchell, Barrister at the Victorian Bar

Sam Ure

A Melbourne barrister practising in commercial disputes, tax and administrative law

The Property Law Blog

Robert Hay QC Property and Commercial Law Barrister

%d bloggers like this: