Mr Pallas (Tarneit) — I also rise to speak on the Sale of Land Amendment Bill 2014.  In so  doing , as  a  barrister  and  solicitor  of  the Supreme  Court of Victoria, as somebody  in possession of a practising certificate and as somebody who has actually  worked in the area of conveying land, I can  tell members that this can  be a surprisingly difficult area  that all too often is passed over by the community at large as  being  a  perfunctory  function. However, there is no more important acquisition that people make in their lives  than the purchase of their homes, and the Sale of Land Act 1962 attaches to that.

Section 32 statements,  or  what are commonly  known as vendor  statements,  are quite often the  foundation  and basis under which the purchaser is informed and the purchaser makes clear decisions about whether  or not  the price is right in terms of purchasing a property.

Those section 32  statements are generally required to be presented at the point of inspection of properties,  particularly  where  auctions  are  concerned, and while  it is important to go through a process  of  re-enacting,  reforming  and modernising provisions  of  the  act,  it  is  important  that  we  do not blind ourselves  with  language associated  with  removing red tape.  We  need also to recognise  that  the red tape we need to  remove  is the red tape that does  not provide adequate and sufficient safeguards for the community and is  that  it is an encumbrance on business and our citizenry.

In  that  respect  I  have  some  reservations  about  this bill. If section  32 statement information — that is, the obligations that a  vendor must make clear to  a purchaser — is passed over in  a superficial way and thus to some  extent the obligations on a vendor are reduced, there must be good reason for it.

At the end of the day while the Latin maxim caveat  emptor, or the buyer beware, must apply, we have a statutory regime that qualifies  that, and  the section 32 statement is a very clear exposition of that statutory moderation of  the  broad principle that the  buyer should beware. In this case it requires that the buyer be informed adequately.

The present  act  requires  those  who sell land in Victoria to disclose certain information through a vendors statement to a purchaser. That is a very important piece  of  precontractual  clarification,  and  when  the  contract  of sale  is ultimately  signed the  section  32 statement  is  generally  appended  to  that contract. The statement becomes, as it were, part and parcel of  the  conditions attaching  to  the  sale,  and  the  information contained in it will inform the purchaser and give them  confidence that  what they  are buying is fit for their purpose. That  is why it is important that the alterations to these changes  are clearly explained and justified.

Part 1 of the bill, the  purpose of the  act and so  on comes into effect on the day after the  royal  assent is granted, and the remaining parts  2  to 5 of the bill will come  into effect on the day of proclamation. That of course gives the legal fraternity  an opportunity to adapt their processes to  these regimes. The bill enacts  section 32  of the Sale of Land Act ‘with improvements to  increase efficiencies   in   the  preparation  of  section  32  statements,  improve  the readability  of  section  32  statements  and  bring  greater  clarity  to,  and refinement   of,  existing   disclosure  requirements.  Redundant  and  outdated provisions in the legislation will not be re-enacted’.

It is in that  context  that this bill should  be construed and assessed  as  to whether  or  not it meets its requirements. The most controversial issue in  the bill is the removal of four generic warnings that relate principally to planning controls, commercial  and agricultural production, growth areas,  infrastructure contributions and the availability of essential services.

There are a  number of  other changes  that have  been made but essentially they relate to the list  of connected services.  Only non-connected services will  be required to  be listed  and therein  I think  lies a problem. We are effectively falling for that Rumsfeldian  problem  of  having known unknowns — that is, the things  that are  not there  — rather  than having a  clear explanation  of the services that are available to the property.

Section 32  statements require vendors  to specify the particulars  of any water supply or sewerage services  connected  to  the  land  not of the standard level available  in the  locality. In  effect there is no obligation to state  what is within the  context  of ordinary or  normal  services within  the  locality, and therefore the provision assumes there is knowledge on the purchaser’s part about what constitutes  the locality’s capacity in this regard. Currently  there is a requirement for a vendor to disclose that  a  planning instrument prohibits construction of a dwelling house on land outside the metropolitan area.

The removal of these provisions could give rise to some concerns — for example, those who  advocate for right-to-farm  legislation  — that there  should  be an obligation to  clarify the  nature of  industries in and around a property to be acquired, so that those who seek to  purchase  a  property and then subsequently revise and assess the amenity and desirability  of the locale in which they have purchased  cannot  use the fact  that  long-established  industries  or  farming practices  constitute  something they  can  agitate  about for  the  purposes of prohibition of long-established industries in those areas.

I have also have great concerns about the removal of the requirement to attach a copy of the section 32 statement to the contract of sale.

It is  one  thing for a vendor  to  sign  a section 32  statement,  but  it is a valuable part of the process of sale. It is a clear precontractual statement  by the  vendor about matters considered sufficiently important that the legislature has required the  vendor to give those assurances  at the point of signing  of a contract  note.  The  point  is if  we take  away that  obligation, we  create a qualification  around the  level  of  clarity  of  the  assurances  given  to  a purchaser. What is the mischief the government is seeking to address here? Is it that there is too  great a  burden upon the vendor in these circumstances? There may  be, and I can understand that in certain circumstances  vendors  will  feel this is an undue irritation. But the legal community understands its obligations in this  respect, so much so that it has  very qualified paralegals who do a lot of this work.

I am  gravely  concerned if we  are  simply  saying, ‘It is  red  tape. They are actions that need not occur. Get rid of them’.

We need to measure it  in the context of the mischief we  are seeking to resolve and  where the burden should properly lie in terms of disclosure associated with land  acquisition. The grave problem  associated with this  provision is that in many   cases   the  bill’s  purported  purpose  of  re-enactment,   reform   and modernisation is just the removal of  an  obligation upon the vendor to disclose issues that are  important for the vendor  to disclose. Those obligations should not be reduced. I have concerns with the removal of section 32 statements from a contract  of sale because in many respects it will undermine   the  quality  and level of assurances given and incorporated into contracts, which ultimately will be enforced.  These are not  minor  or small contractual  arrangements  that are entered into. They are serious arrangements, and  they go to the very livelihood and  wellbeing  of the  purchaser.  The principle  of  caveat  emptor, which  is clarified by legislation, should be preserved.